Order types in depth

A market order says “fill me now at whatever is available”. In a liquid market at a quiet hour, available is the price you saw. In a fast market it is not, and the difference is slippage. Slippage runs both ways, though you will remember the bad fills and forget the good ones.

MT5’s deviation setting caps it: set a maximum deviation in points and an order that cannot be filled inside that band is rejected rather than filled worse. Rejection is sometimes the better outcome and sometimes far worse — a rejected exit in a falling market leaves you still in the trade.

Use market orders for entries where being in matters more than the exact price, and always for emergency exits.

A limit order waits for a better price than the current one. A buy limit sits below the market and a sell limit sits above it. You are saying: I want in, but only at my price, and I accept that I may never get filled.

Limits are the natural tool for mean-reversion and for entering pullbacks. They cost nothing to leave sitting, they cannot slip against you on entry, and they impose patience by construction.

The failure mode is the trade you wanted most: price runs straight to target without ever coming back to your limit, and you watch the entire move from the sidelines with a live pending order on the chart.

A stop order waits for a worse price. A buy stop sits above the market and a sell stop below it. You are saying: I do not want in yet, but if price gets there it has proved something and I want in then.

This is the breakout tool, and it is what most grid and straddle systems are built from — a buy stop and a sell stop bracketing the current price, so whichever way the move comes you are carried into it.

How far the stops sit from price is the single most important parameter in such a system. Too close and every wiggle triggers both sides; too far and the move is half over before you are filled. Broker stops level sets the floor on how close you may place them at all.

A stop-limit is two prices. The stop price arms the order; the limit price then defines the worst fill you will accept. Price trades up through your buy stop at 4,360, which places a buy limit at 4,360.50, and you are filled only if the market is still at or below that.

It exists to solve one problem: breakouts that gap far past your trigger. A plain buy stop would fill you at the top of the gap. A stop-limit refuses.

The cost is the same as any limit — on the fastest, most decisive breakouts, the ones you most wanted, you do not get filled at all. Use it when a bad fill is worse than no fill, and a plain stop when the reverse is true.

Stop loss and take profit ride with the position and execute automatically, server-side, whether or not your platform is running. That last point is the reason to use them rather than watching the screen.

A trailing stop moves the stop in your favour as price advances and never moves it back. Two numbers define it: activation, the profit at which trailing begins, and distance, how far behind price the stop rides. MT5’s built-in trailing stop is client-side — it only works while the terminal is open. A trailing stop written into an expert advisor, or run on a VPS, does not have that weakness.

Trailing turns a winner into an unknown-but-positive result instead of a fixed target. Whether that helps depends on whether your instrument trends; on a ranging instrument, trailing gives back most of what a fixed target would have banked.

Pending orders default to GTC — good till cancelled — which means an order you placed for a Tuesday setup is still armed on Friday. Set an expiry, or make it a habit to clear pendings at the end of every session.

Partial fills happen when there is not enough at your price to fill your whole size. You end up with a smaller position than intended and, on some execution models, the remainder cancelled. Check your actual open volume after any fill in a fast market rather than assuming.

Orders also interact with margin: a pending order does not hold margin, but the moment it triggers it does. A set of pendings that would all be fine individually can collectively exceed your free margin, and the last ones will simply fail.

Ask two questions. First: does being in the trade matter more than the price I get? If yes, market order. Second: do I want in at a better price than now, or only after price proves something? Better price is a limit; proof is a stop.

For exits the hierarchy is simpler. Protective exits should be stop losses sitting on the server. Profit exits can be limits or trailing stops. Emergency exits are always market orders, and you should never hesitate over the fill.

Most bad order choices come from using a limit where a market order was needed, because a limit feels cheaper — and then discovering that the cheapest possible fill is the one that never happens while the position runs against you.