Forex Order Types: Market, Limit, Stop and More Explained

Market orders

A market order says “trade now at the best available price”. Buys fill at the ask, sells at the bid. In fast markets the fill price can differ from the price you saw — this difference is called slippage, and it can be positive or negative. On platforms that use instant execution rather than market execution, the broker may instead respond with a requote at a new price.

Pending orders: limit and stop

Pending orders wait until price reaches a level you choose. Which type you need depends on whether that level is better or worse than the current price.

Order	Placed	Use it when you expect…
Buy limit	below current price	price to dip, then rise
Sell limit	above current price	price to rally, then fall
Buy stop	above current price	a break higher to continue rising
Sell stop	below current price	a break lower to continue falling

Four orders on EUR/USD at 1.0850

• Buy limit at 1.0820 — buy on a pullback to support.
• Sell limit at 1.0890 — sell into resistance.
• Buy stop at 1.0880 — buy if price breaks above 1.0880.
• Sell stop at 1.0815 — sell if price breaks below 1.0815.

Limit orders are generally filled at your price or better, subject to available liquidity. Stop orders typically become market orders once triggered, so they can fill at a worse price during a fast move; exact order handling depends on the platform and the broker’s execution model.

On most retail FX platforms, including MetaTrader, buy limit and buy stop orders are triggered when the ask reaches the order price, and sell limit and sell stop orders when the bid does — see bid/ask and pending orders.

Buy limit vs buy stop

Both are orders to buy, but they sit on opposite sides of the current price:

• Buy limit — placed below the current price, to buy more cheaply if the price dips first.
• Buy stop — placed above the current price, to buy only if the price rises through a level, for example on a breakout.

Sell limit vs sell stop

• Sell limit — placed above the current price, to sell at a higher price if the price rallies first.
• Sell stop — placed below the current price, to sell only if the price falls through a level.

Stop-limit orders

Some platforms, such as MetaTrader 5, also offer buy stop limit and sell stop limit orders. When the stop price is reached, a limit order is placed at a price you set, instead of a market order. This avoids being filled at a much worse price in a fast move, but the order may not be filled at all if the market moves past the limit price.

Orders that close a trade

• Stop loss — closes a losing trade at a predetermined level. For a long position it sits below entry; for a short, above.
• Take profit — closes a winning trade when the price reaches your target.
• Trailing stop — a stop loss that follows price by a set distance as the trade moves in your favour and does not move back. Once it has moved past the entry price it can lock in part of the profit, although gaps and slippage can still lead to a worse fill.

A trade with both exits

Buy EUR/USD at 1.0850 with a stop loss at 1.0825 (25 pips risk) and a take profit at 1.0900 (50 pips target). The trade will close automatically when whichever condition is triggered first — a 1:2 risk-to-reward setup before costs and slippage. In fast markets the actual exit price can differ from either level, so the realised risk-to-reward can differ too.

Size positions so that the loss at your stop is an amount you accept — use the position size calculator.

Other order instructions

• OCO (one cancels the other): two orders linked so that when one fills, the other is cancelled — for example a buy stop above and a sell stop below a range. Depending on the broker, OCO is a native order type, a platform-side function or an add-on, and it is not available on every platform.
• Good ’til cancelled (GTC) and day orders: control how long a pending order stays active. A day order expires at the end of the trading day as defined by the broker’s server time, which may not match your local time.