Understand This First Before Using Pending Order
The pending order strategy has gained popularity among futures market traders. This situation is due to the high efficiency of the working tactic, which allows it to reduce the psychological stress of market participants and to open profitable positions in conditions of sharp price changes. With the help of this strategy, the profitability of a forex trade can be increased several times. This strategy can be used by beginners, as well as professionals in trading to increase trading efficiency.
A pending order is an order that will be executed when the price touches a predetermined point. Or place an order to open a position at a certain price level. In carrying out a pending order, the trader must pay attention to the applicable rules and how far the points can be placed to order the price so that if the price has been touched with the price ordered earlier, it will turn into an open position so that with the open position it can generate maximum profit. .
Pending Order Type
Before a trader uses a pending order, the trader needs to determine the level that will be the target. The target can be above or below the current price. Depends on the type of pending order trader. There are 4 types of pending orders that are very often used, namely buy stop, sell stop, buy limit, and sell limit. In order not to be difficult to understand, these four pending orders are divided into 2 categories, namely limit orders and stop orders.
1. Limit Order
Limit orders are placed aiming to make the target open buy below the current price or open sell above the current price.
2. Stop Order
Stop orders are used to create a target to open buy above the current price or open sell below the current price.
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