Pending order for "Forex"

A pending order is a specific order to open a trade, which allows the trader to solve a very important task. It provides an opportunity to open a transaction at a predetermined price. Thus, a trader does not necessarily have to be constantly in front of the monitor. In comparison with the orders of immediate execution, trade in this format is more convenient, it reduces the time spent in front of the monitor in anticipation of the moment when the price reaches the optimal place to open a deal.

Explicit advantages of pending orders

A pending order is a universal functional for trading, with the help of which it is possible to minimize losses, which is a prerequisite for profitable trading. Corrective waves are considered to be the most convenient periods on the market for using this category of orders. Wait until the price returns to a certain place and again continues to move on the trend is not quite the right line of behavior. Maybe the correction is delayed, and a clearly pronounced trend to change into a flat that will only delay the moment of entering the market. In order not to rush and not wait for an uncertain moment at the monitor, it is more rational to set pending orders at peak levels.

Absence of slippage is an important advantage

Many traders are perfectly familiar with such a concept as slippage. This opening of the order at a price higher or lower than that which is in the terminal at a certain point in time. The deal opens on a certain number of points in the opposite direction. That is, buying or selling is carried out in the negative. The reasons for this phenomenon can be just two. This is illegal actions on the part of the broker to cash in or just a bad technical component of the terminal, because of which the broker lingers with the opening of the deal. When pending orders are used for Forex, the broker loses the opportunity to open a trade with profit for himself, and the trader receives the maximum accuracy when entering the market.

Characteristics of pending orders

Traders have only four types of pending orders. Let's get acquainted with each of them:

• Pending Buy Stop. This is a decree to a broker to buy an asset at a value that is higher than that available on the market. The decree is established in the situation when a continuation of the trend is planned in the long term. The bet is made that the schedule will break the Ask price at a certain level.
• Buy Limit is an order to open a purchase transaction after Ask's price has reached a certain pre-value. The order type is aimed at opening a deal to continue the uptrend after a small price correction.
• Sell Limit is designed to open trades at a Bid price with a long downtrend. The order will be activated when the price after a short northern trend falls below the actual value in the market.
• Sell Stop - this is another type of order, focused on the sale of the asset. Sale of quotations is carried out at the Bid price, after the price is lower than the actual level.

What settings are needed to activate pending orders?

In order to activate the pending order, it is enough simply to fill in the embedded form in the terminal. Within the scope of the functional, the volume of the transaction is established. It is necessary to fix the price at which the order will be activated. Some brokers require the setting of a stop-loss and take-profit. Others allow you to ignore these values. You need to pay attention to the type of order that you plan to open. If the chosen program does not correspond to the situation on the market, the order will simply not be activated. Another point is the activation time. In the terminal it is proposed to set the time during which the order can be activated. If the price does not reach the projected level before the set date and time, the order is canceled.

Important points worthy of attention

Studying "Forex for Dummies", it is unlikely to find important moments of using orders. It is worth paying attention to the fact that deferred orders do not always work. Brokers may not activate the order in the event that the market has formed a hep-price gap as a result of a sharp price change. Discontinuities can be observed most often after the weekend, especially if at that time on the world stage important economic or political events take place. In practice, if an order falls into a gap, this is in fact a signal for its cancellation. You can also talk about the special conditions for execution of deferred orders, which each broker determines individually. The rules are based on observing distances from the actual price to the established order. This parameter already includes the spread value for each individual pair. For each trading instrument, its size is of this magnitude. The broker reserves the full right to refuse to adjust the order in the event that the price is already in the immediate vicinity of it.

Stop-loss and take-profit in the framework of the deferred order

Trading in pending orders opens up chic prospects for traders. Many hours of work before the terminal can be successfully replaced with just a few hours of analysis of the situation for making trading decisions. Orders provide an opportunity not only to open a deal at a clearly established price, they provide for its closing on profit or loss. It is not absolutely necessary to monitor the situation on the foreign exchange market . The broker will do everything independently, in accordance with the established prices for closing the deal. All that remains for a trader is to evaluate the results of his trade, whether successful or not. Multifaceted settings of deferred orders allow you to remove cream from the market when it forms certain patterns, and there is simply no opportunity to be in front of the terminal.

Why four types of orders, when you can limit only two?

Studying "Forex for Dummies", many newcomers repeatedly wonder about why there are as many as four types of orders, when it could be limited to only two: buying and selling. It's simple: trying to simplify the life of beginning market participants, brokers have built up the most detailed orders in order to reduce the number of errors and misses. This feature of orders for work on the stock exchange is especially actual . As you know, on it, in comparison with the "Forex", a rather large amount of commission is envisaged. And if the deal is open in the wrong direction for a few seconds, and then closed, it is fraught with large losses. Note that all pending orders are carefully stored on broker servers and are activated regardless of whether the terminal is turned on when the price reaches a certain level or not.

Why do not the orders work?

Many traders who use "Forex" advisers to set pending orders, as well as those who install them manually, have repeatedly complained that profitable orders simply do not work, provided that their price is catching. The situation is very common, and it is associated mainly with such a concept as spread, which always plays against traders. There is always a difference between the purchase price and the sale price of the asset, which is equal to several points. Thus, when opening a deal, the bidder immediately becomes at a loss. When taking a profit, you need to focus on the fact that to the established level of profit you need to add also the size of the spread. So, if the profit is at a distance of 100 points from the opening price of the transaction, it will close when the price overcomes not only these 100 points, but also the spread itself. As for stops, they often close before the established level exactly by the size of the spread.

Mutually canceled orders

Each trader should know about the existence of such a concept as pending orders for "Forex" of a mutable type. They are also known as CCA or One Cancles Others. The essence of such orders is that they are installed in opposite directions. When one of the orders is activated, the other is automatically canceled. A vivid example of interchangeable orders can serve as stops and profits. When one of them is executed, the second instantly closes. Working with this type of order is very effective from the borders of the price channel. One order is placed in the inner part of the channel and is focused on the rebound, and the second - behind the level of the channel, on its penetration. When using standard orders, there is a high probability of obtaining two negative transactions as a result. Unfortunately, work with this type of orders is not adapted for either the MT4 terminal or the advisor of pending orders. According to experts, this format of decrees significantly complicates the life of newcomers.

What are the "Forex" advisers for trading orders?

Today there are many automated trade indicators of various types. The most common among the traders adviser "Forex", working with orders, is known as Burn. He installs two opposing orders from the beginning of the trading session. Stops and profits are set automatically after the order is activated and after the price has already passed to the level without loss. The pending order is placed on hour timeframes. However, there are traders who experiment and in smaller time intervals. The profitability of such a system is variable, but, according to its users, reaches 2% per day. Opening of pending orders is an excellent opportunity for all traders to avoid mistakes due to impatience. The use of such a trade format is practiced in many trading systems and allows to achieve good results.