Module 3: Trading sessions and orders · Lesson 11 of 13
Market vs pending orders
3 min read
A market order buys or sells straight away at the best price currently available. A pending order is an instruction to open a trade later, only if the price reaches a level you have chosen in advance.
Market orders
A market order prioritises speed. You click buy or sell, and the trade is filled almost instantly at the current ask (for buys) or bid (for sells).
The catch is that you do not control the exact price. In fast markets the fill may be slightly different from the price you saw, which is called slippage. Slippage can occasionally work in your favour, but often it does not.
Pending orders
Pending orders let you plan trades without watching the screen constantly. There are four common types, built from two ideas: limit and stop.
- A limit order waits for a better price than the current one.
- A stop order waits for the price to move further in the same direction before entering.
| Order | Placed | Typical idea |
|---|---|---|
| Buy limit | Below current price | Buy cheaper after a dip |
| Sell limit | Above current price | Sell higher after a rise |
| Buy stop | Above current price | Buy if price breaks upwards |
| Sell stop | Below current price | Sell if price breaks downwards |
Worked examples
Example: EUR/USD is at 1.1000. You would like to buy, but only at a lower price, so you place a buy limit at 1.0950. If the price falls to 1.0950, your order is filled. If it never gets there, no trade opens.
Example: GBP/USD is at 1.2500 and has struggled to rise above 1.2550. You want to buy only if it breaks through that level, so you place a buy stop at 1.2560. If the price climbs to 1.2560, the order triggers and you go long.
These prices are illustrative, not suggestions.
Expiry and cancellation
Most platforms let you set an expiry, such as end of day, or keep the order open until you cancel it. Remember that a forgotten pending order can still trigger, so review them regularly.
Risk: Stop orders become market orders once triggered, so in volatile conditions they may be filled at a worse price than the level you set.
Key takeaways
- Market orders fill immediately but at whatever the current price is.
- Pending orders open a trade only if price reaches your chosen level.
- Limit orders wait for a better price; stop orders wait for a breakout.
- Review open pending orders so none trigger unexpectedly.
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