There are six different types of pending order available in MT4/MT5, it's a good idea to familiarise yourself with them as each one can be thought of as a different tool for a different job. We have broken the six available pending orders into "Beginner," "Intermediate," and "Advanced." Let's begin with "Buy Limit" and "Sell Limit" orders, as these are the most basic and can be understood the most intuitively by most beginners.

Buy Limit. A buy limit is simply a pending order to open a long, or buy position at a lower price than the current market price. The logic behind this type of order is simple. You're trying to buy the underlying market, but you wish to do so at a lower price. So, rather than waiting around with your finger on the trigger for this to take place, you can instruct the platform to do it for you should the market reach a specific price while you're away..

Sell Limit. Sell limit orders work in the same way as buy limit orders, only the opposite way. You place one when you want to sell, or short, a market, but at a higher price. You may believe the market in question is becoming overbought, but want to wait to sell it closer to what you believe will be the top.

Buy Stop. A buy stop order is similar to a buy limit, in that you place it when you're attempting to buy the underlying market, or go long. However, you're not waiting to get in at a cheaper price. Instead, you're instructing the platform to open a position when the price reaches a level predefined by you that is higher than the current market price. Why would you want to do this? Perhaps as an insurance that the market doesn't climb out of your reach while you're away from the platform, or maybe you're waiting for the price to break through a critical resistance level.

Sell Stop. Sell Stop orders work like Sell Limit orders, only instead of wanting to sell, or short, the market when the price goes higher than the current market price, this type of order allows you to sell the market when it goes lower. Why? Similar to what we saw above in the case of Buy Stop orders, you may not be ready to enter your position at the present moment, but you would like to ensure that the market doesn't move in the direction you are expecting and get away from you while you are away from your screen. You may also be monitoring an important support level that you believe is about to be broken. So, you can set your sell stop order at that level in order to make sure that you catch the moment that it does break below it, even while you're away from the platform.

Buy Stop Limit

The easiest way to understand a Buy Stop Limit order, is that it's a sort of combination of both a Buy Limit order and a Buy Stop order. It's more advanced than the pending orders we've explored up until now, but nevertheless quite useful when you get the hang of it. Buy Stop Limit orders allow you to do some pretty interesting things while you're away from your trading terminal.

Simply put, a Buy Stop Limit order allows you to set a price above the current market price at which a Buy Limit order is automatically created. As we saw earlier, Buy Limit orders instruct the platform to open a trade at a lower price than the current one. So, what these orders essentially do is take advantage of the way that markets tend to zig-zag, without you having to be at your screen.

Rather than just buying the asset at the higher price the way a Buy Stop does, this order assumes that once the price rises it will also come back down, so you set your "Stop Limit" price above the current market price, if the market gets to that price a Buy Limit order will automatically be created for you at the level you've specified in the "Price" tab of the order terminal (which, again should be lower than your Stop Limit level).

In this way, you can set your Stop Limit price at a strong resistance level, knowing that if the price gets there it will probably be rejected at least once, and then you can have your order triggered at a lower price of your choosing once the price retraces back.

Sell Stop Limit

Like all the pending sell orders above, a Sell Stop Limit order works in the opposite way. It allows you to set a trigger (Stop Limit), lower than the current market price. Once triggered, this will automatically create a Sell Limit order at a level that's higher. So, for example, you're expecting EURUSD to fall below 1.00, but know that this is a significant level of support that will probably cause the price to bounce higher temporarily. You set your Stop Limit at 1.00 and your Buy Limit at 1.02. The price drops to 1.00, triggers the creation of a Sell Limit order at 1.02, and when the price bounces back up to this level, as you have predicted, your trade is executed.