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Order Types: Market, Limit, Stop and Stop-Loss
Market, limit, stop and stop-loss orders each do one job. What each one does, when it fills, and what getting in costs you.
What a trading order is
An order is an instruction to the platform: what to trade, how much, and on what condition. There are three groups.
- Orders that fill now. The market order.
- Orders that wait for a price. Limit and stop orders, which sit on the server as pending orders until price reaches your level.
- Orders attached to a position you hold. Stop-loss and take-profit.
Your choice decides two things: whether you get in at all, and at what price. No order type gives you both.
Market orders and the price you actually get
A market order fills at the best price available the moment it reaches the server. You choose the size and the direction, not the price.
Every instrument carries two prices. The bid is where you sell, the ask is where you buy, and the gap is the spread. A market buy fills at the ask and is valued at the bid, so the position opens showing a small loss equal to the spread. That is a cost, not an error.
In fast markets and thin hours, price can move between your click and the server. The order still fills, at the next available price. This is slippage: a market order puts being filled ahead of the fill price.
Limit and stop orders: waiting for a price
A limit order sits at a better price than the market and fills at your price or better. A buy limit sits below the current price: buy, but only if it gets cheaper. You control the price, but price may never reach it.
A stop order sits at a worse price than the market, and traders use one to enter only after price moves their way, as confirmation. When price touches it, a stop order becomes a market order: your level is a trigger, not a fill price, and in a fast market you can be filled well beyond it.
| Order | Sits where | Price you get |
|---|---|---|
| Buy limit | Below current price | Your price or better |
| Sell limit | Above current price | Your price or better |
| Buy stop | Above current price | Next available price after the trigger |
| Sell stop | Below current price | Next available price after the trigger |
Stop-loss, take-profit and how long an order stays live
A stop-loss closes an open position once price reaches a level you set. On a long it sits below your entry; on a short, above, following the direction you took in going long vs going short. A take-profit does the same on the other side.
What a stop-loss does not do is fix your exit price. It is a stop order, so it becomes a market order when triggered. If price gaps past your level over a weekend or on a data release, the position closes at the first price available. Sizing so that this stays survivable is the subject of position sizing and the 1% rule.
Pending orders also have a lifespan. Most default to good till cancelled and stay live until you delete them, so one placed two weeks ago can still trigger. You can also set a day order or an expiry. The MT5 platform order ticket lists each type by name alongside that expiry field.
Worked example: a buy limit with a stop-loss on EUR/USD
EUR/USD is quoted 1.0850 / 1.0851, a typical one-pip spread for illustration. You want to buy at 1.0800, not at 1.0851.
- You place a buy limit for 0.10 lots at 1.0800.
- The ask touches 1.0800 and the order fills. On 0.10 lots, one pip is worth about $1. The bid is 1.0799, so you have already paid a pip: the position opens showing about -$1.
- You attach a stop-loss at 1.0770, 30 pips below entry. A long is closed on the bid, so the real distance is 30 pips plus the spread. If hit, about $31 comes off your balance.
- A take-profit at 1.0860 sits 60 pips the other way, at the same $1 per pip.
Now the case that matters. If EUR/USD opens on Sunday below 1.0770, the stop-loss triggers, becomes a market order, and fills at the first price quoted. At 1.0740 the trade costs about $61, not about $31. The stop-loss closed the position, which is its job. It did not cap the cost at the number you wrote down.
Key takeaways
- A market order fills at the next available price, and the spread is a cost you pay as the position opens.
- A limit order fills at your price or better but may never fill; a stop order fills once triggered, at a price you do not control.
- A stop-loss closes a position but does not fix the exit price, because a gap can carry price past your level.
Common questions about order types
What is the difference between a limit order and a stop order?
Position relative to the market, and what you get. A buy limit sits below the market and fills at your price or better. A buy stop sits above the market and becomes a market order when touched, so the fill can be worse than your level. Limits control price; stops control participation.
Does a stop-loss always close my trade at the price I set?
No. It triggers at your level, then executes at the next price available. Normally those sit close together. Over a weekend gap, or during a major data release, price can jump past the level and the position closes further away.
What happens to pending orders when I am away from the platform?
They stay on the server and can trigger without you. Good-till-cancelled orders stay live indefinitely, including across the weekend and into the Monday open. If you no longer want a level, delete the order rather than trusting memory, and review the pending list regularly.
Practise it before it costs anything
A demo account runs the same platform on the same live prices, with nothing at stake.
