A pending order is a buy or sell instruction that a trader sets in advance at a chosen price level. The order does not execute immediately — it waits until the market price reaches that level, and only then does the system open the position automatically. Unlike a Market Order, which executes right away at the current price, a pending order suits traders who plan their entries ahead of time and don't want to watch the screen constantly.
This article walks through the four main types of pending orders — Buy Limit, Sell Limit, Buy Stop, and Sell Stop — how they differ, when to use each one, and how to place them in MetaTrader 4/5 (MT4/MT5).
What Is a Pending Order and How Does It Differ from a Market Order?
When trading forex or gold (XAU/USD), there are two main ways to send an order:
- Market Order — buys or sells immediately at the current market price. Useful when you want to enter without waiting.
- Pending Order — sets the price you want to buy or sell at in advance. The system only opens the position automatically once price reaches that level.
Pending orders are an important tool for traders who have a clear trading plan, such as waiting for price to pull back to support before buying, or waiting for a breakout above resistance before following the move.
The 4 Types of Pending Orders You Need to Know
Pending orders fall into two main groups: Limit Orders (placed at a better price than the current one) and Stop Orders (placed at a worse price than the current one, but used to confirm trend direction). Together, there are 4 types:
1. Buy Limit (Buy Below the Current Price)
A Buy Limit is an order to buy in advance at a price below the current market price. It's used when a trader expects price to pull back to a certain level before bouncing higher. Example: gold is trading at $2,650, but you expect it to dip to support at $2,630 first before rebounding — so you place a Buy Limit at $2,630.
2. Sell Limit (Sell Above the Current Price)
A Sell Limit is an order to sell in advance at a price above the current market price. It's used when a trader expects price to rally into resistance first before reversing lower — a common setup for range trading or waiting to sell at a resistance zone.
3. Buy Stop (Buy Once Price Rises to a Set Level)
A Buy Stop is an order to buy in advance at a price above the current market price. It's used when a trader believes that if price breaks above resistance, the trend will keep pushing higher (a breakout). Example: price is currently at resistance around 1.0850, and if it breaks through to 1.0860 it tends to keep climbing — so you place a Buy Stop at 1.0860.
4. Sell Stop (Sell Once Price Falls to a Set Level)
A Sell Stop is an order to sell in advance at a price below the current market price. It's used when a trader believes that if price breaks below support, the downtrend will keep going — a common choice for downside breakout strategies.
Comparison Table: All 4 Pending Order Types
| Type | Price Placement | Used When You Expect... | Trading Style |
|---|---|---|---|
| Buy Limit | Below the current price | Price to pull back first, then rise | Waiting to enter at support / pullback |
| Sell Limit | Above the current price | Price to rally first, then reverse down | Waiting to enter at resistance / pullback |
| Buy Stop | Above the current price | Price to break resistance and keep rising | Following an upside breakout |
| Sell Stop | Below the current price | Price to break support and keep falling | Following a downside breakout |
What Is a Stop Limit Order? (An Advanced Order Type)
Some platforms, such as MT5, offer an additional order type called Buy Stop Limit and Sell Stop Limit, which combine a Stop Order and a Limit Order into a two-step process. Once price reaches the Stop level you set, the system doesn't open a position right away — instead, it places a Limit Order that waits for a more precise price. This suits traders who want tighter control over their entry price, though it's more complex to use and better suited to intermediate or more experienced traders.
How to Place a Pending Order in MT4/MT5
- Open MT4 or MT5 and select the currency pair or asset you want to trade.
- Click New Order, then in the Type tab switch from "Market Execution" to "Pending Order".
- Choose the order type you want (Buy Limit / Sell Limit / Buy Stop / Sell Stop).
- Enter the price at which you want the order to open, and set your Stop Loss (SL) and Take Profit (TP) at the same time.
- Choose an expiry setting, such as GTC (Good Till Cancelled), which keeps the order active until you cancel it, or set a specific expiry date.
- Click Place Order to confirm.
Traders can edit or cancel a pending order at any time before it's triggered, as long as price hasn't reached the level you set.
Advantages of Using Pending Orders
- No need to watch the screen constantly — set your plan in advance and let the system execute it for you.
- Better emotional control — reduces impulsive, in-the-moment decisions, which often lead to emotional trading.
- Entries that match your actual plan — you won't miss a level because you reacted too slowly, especially in fast-moving markets.
- Works across strategies, such as breakout trading (Buy Stop/Sell Stop) or pullback trading (Buy Limit/Sell Limit).
Risks to Watch for When Using Pending Orders
- Slippage — around major news releases or during high volatility, the actual fill price can differ from the price you set, because liquidity shifts very quickly.
- False breakouts — price may briefly touch your Buy Stop/Sell Stop level and then reverse, leaving you positioned the wrong way. It helps to confirm with volume or a trend indicator before relying on the breakout.
- Forgetting to set a Stop Loss — a pending order without an SL can cause significant losses if price moves sharply against you. Always set an SL when placing an order.
- Orders expiring or being cancelled automatically — some brokers apply a short default expiry, so always check this setting before placing an order.
- Requotes — on some Instant Execution systems, you may get offered a new price (a requote) if the market moves too fast. Choosing a broker that offers Market Execution can reduce this issue. It's also worth remembering that the legal protection you get depends on which regulated entity your account sits under — brokers licensed by FCA, ASIC, or CySEC, for example, offer different levels of investor protection than an unregulated offshore entity, so it pays to check which entity you're actually signing up with.
Real-World Examples
Breakout strategy with a Buy Stop: If a gold chart has formed horizontal resistance around $2,700 multiple times, and you expect strong buying pressure once price breaks above it, you could place a Buy Stop at $2,702 with an SL below the old resistance level, to catch the breakout without watching the screen.
Pullback strategy with a Buy Limit: If EUR/USD is in a clear uptrend and price is pulling back toward a moving average around 1.0820, a trader who expects price to bounce back in the direction of the main trend could place a Buy Limit at 1.0820 to enter once the pullback reaches that level.
Conclusion
Pending orders are a fundamental tool that every forex and gold trader should understand well, since they help you plan trades in advance with discipline, reduce emotional decision-making, and avoid missing important market moves. That said, placing pending orders should always come with solid risk management — setting a Stop Loss every time, and understanding the risks of slippage or false breakouts that can occur during volatile conditions.
Frequently Asked Questions (FAQ)
What's the difference between a pending order and a limit order?
A limit order is one of the two subtypes of pending order (the other being a stop order). A limit order is placed at a better price than the current market price, while a stop order is placed at a worse price than the current one but is used to confirm trend direction.
Why hasn't my pending order triggered?
The most common reasons are that price simply hasn't reached the level you set, or the order has already expired. Always check your expiry setting and compare the current price against the level you placed.
Which pending order type should beginners start with?
Start with Buy Limit and Sell Limit, since they help you practise waiting for a better entry price around support and resistance. Once comfortable, move on to Buy Stop/Sell Stop for breakout strategies, which require reading market momentum more actively.
References: FBS Glossary, LiteFinance
