Trading on a funded account requires knowledge of how to utilize the tools accessible on your trading platform. MetaTrader 5 (MT5) is one of the most widely used and comprehensive platforms available for traders to use in various financial markets. The key to mastering MT5 is knowing the various types of trading orders at your disposal. Knowing when and how to use these orders can improve trade entry, risk management, and alignment with your strategy. Scalping, swing trading, or holding long-term, MT5 order types can help you gain better control of your entries and exits.
Market Orders
Market orders are the fastest and simplest way to enter a position in MT5. When you place a market order, you are instructing the site to buy or sell a financial instrument immediately at the available market price. The order will be executed but not the exact price, especially in liquid markets where slippage could occur. For a funded trader, market orders are particularly appropriate where quick execution is needed—such as when responding to an unexpected news release or when the price is moving aggressively in the direction one wants. It is the easiest method to enter the market but should be used with careful consideration to avoid surprise fills during volatile periods.
Pending Orders
Pending orders allow a trader to make advance planning for their entries by entering predetermined price levels where they want a trade to become active. Four major types of pending orders in MT5 are Buy Limit, Sell Limit, Buy Stop, and Sell Stop. Traders use these orders to avoid from monitoring the markets round-the-clock by having advance entry points. This not only saves time but also removes emotion from the decision-making process. With a financed account, pending orders can help keep one disciplined by following a pre-set strategy and trading based on anticipated price actions rather than acting on whims.
Buy Limit
A Buy Limit order in MT5 is used when a trader predicts the price of an asset falling to a certain level before rising again. It is placed below the current market price and is only triggered when the market reaches that lower point. A sample would be if a currency pair is quoted at 1.2000 and the trader is anticipating it to drop to 1.1950 before it goes up again, a Buy Limit can be set at 1.1950. This is a strategy that allows the trader to buy at a better price with the anticipation of capturing the next move up. It is most ideal for traders who prefer to buy at support or in retracements.
Sell Limit
A Sell Limit order is the opposite of a Buy Limit. It is used when the trader expects the price to reach a certain level before it falls. This kind of order is placed above the current market price and is executed when the market reaches this higher level. For example, if the stock is at $50 and the trader anticipates reversal at $52, a Sell Limit may be placed at $52. This order is useful for users who prefer selling at the areas of resistance or on expectation of price exhaustion at higher levels. For supported traders, Sell Limits can help freeze better selling prices rather than reacting to price spikes.
Buy Stop
A Buy Stop order will be taken into the market as the price crosses a specific level, indicating probable bullish pressure. This is placed above the current market price and initiated after it has been reached. For example, if EUR/USD is 1.1000 and a trader expects that there will be a breakout at 1.1050, then a Buy Stop at 1.1050 will execute a buy transaction once the price of 1.1050 has been reached. It is a momentum entry strategy used when the traders expect good follow-through on a resistance level. It is a strategy preferred by those who want to trade breakouts rather than reversals.
Sell Stop
A Sell Stop is the reverse of a Buy Stop. It is placed below the current market price and activates when the market drops to that lower price, which may suggest bearish momentum. For instance, if GBP/USD is 1.3000 and a trader thinks that the price will collapse if it goes below 1.2950, then a Sell Stop order at 1.2950 may be placed. This order is frequently used in breakout trading so that the trade can go short as the market keeps falling. For funded account holders, Sell Stops assist in taking advantage of momentum-based selloffs.
Stop Loss and Take Profit
Stop Loss and Take Profit orders are simple tools for handling risk and reward. A Stop Loss order automatically closes a trade at a set price to limit losses if the market moves against the position. A Take Profit order closes a trade at a set level to lock in profits if the market moves in the position direction. Both orders can be used for pending and market orders and are necessary to maintain equal risk control for every trade. To a funded trader, capital protection is equally important as profit, and the use of Stop Loss and Take Profit orders ensures that both are handled routinely and efficiently.
Conclusion
Understanding the order types on MT5 is essential to all traders who have a funded account. From straight execution with market orders to carefully considered entries with pending orders, each one has a unique advantage based on your trading method. Proper use of Buy Limit, Sell Limit, Buy Stop, and Sell Stop orders allows traders to stay a step ahead of the market without adhering to the screen. Stop Loss and Take Profit orders on the other hand provide immensely crucial capital preservation and profit locking measures. Mastering these types of orders enables traders to better manage their trades, reduce emotional decision-making, and enhance their overall level of performance in the markets.
