# Order Types Explained - Market, Limit, Stop

> Understanding the different order types in forex is essential for controlling when and at what price your trades execute. Here is a clear explanation of each type.

**Tags:** order-types, market-order, limit-order, stop-order, forex-basics
**URL:** https://traderjournal.app/forex-basics/order-types-explained-market-limit-stop

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# Order Types Explained - Market, Limit, Stop

MetaTrader offers several order types that control how and when your trades execute. Understanding each type gives you more precise control over your entries and exits.

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## Market Order

A market order executes immediately at the current available price.

When you click "Buy at Market" in MT4, your order is sent to the broker and filled at the best available ask price at that moment. You get in immediately but have no price control - the execution price may differ slightly from what you saw on screen (slippage).

**Use when:** You need immediate entry and execution speed is more important than exact price.

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## Limit Order

A limit order executes only if price reaches a specific level, and only at that price or better.

**Buy Limit:** Placed below the current price. If you expect a pullback before the trade continues upward, you can set a buy limit at the pullback level. The order fills if price drops to that level.

**Sell Limit:** Placed above the current price. If you expect price to rise to a resistance level and then reverse, you set a sell limit at that resistance.

Limit orders guarantee your fill price (or better) but do not guarantee the order fills at all - if price never reaches the limit level, the order remains open or expires.

**Use when:** You have a specific entry price in mind and are willing to wait for it.

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## Stop Order (Entry)

A stop order becomes a market order when price reaches a trigger level, but it is used for entering in the direction of the breakout rather than on pullbacks.

**Buy Stop:** Placed above the current price. If you want to enter a long trade when price breaks above a resistance level, you place a buy stop at that level. When price touches the trigger, the order converts to a market buy.

**Sell Stop:** Placed below the current price. For shorting a breakdown, set a sell stop at the breakout level.

**Use when:** You want to enter on a breakout but are not watching the market actively.

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## Stop Loss Order

A stop loss is a standing order that automatically closes your position if price moves against you to a specified level.

This is the most important order type for risk management. Every open position should have a stop loss order in the market. Without one, a losing trade can run until it triggers a margin call.

In MT4/MT5, stop loss levels are set in the trade ticket when opening a position and can be modified while the trade is open.

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## Take Profit Order

A take profit order automatically closes your position when price reaches your target level.

Setting a take profit removes the need to monitor the trade manually and prevents the "greedy hold" behavior where traders remove their targets hoping for more profit.

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## One-Cancels-Other (OCO)

An OCO is a pair of orders where filling one automatically cancels the other. Useful for bracketing a trade - placing both a take profit above and a stop below the current price. When one fills, the other cancels.

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