Order Types

Understanding Order Types

Order types are more than execution tools — they’re how you control when you enter the market, how you exit, and how you manage risk on every trade.

Whether you trade forex or CFDs, choosing the right order type can help you execute with precision, protect your capital, and avoid unwanted price moves.

Start with the essentials you’ll use most often: market orders for immediate execution, and limit orders when you want a better price than the current market.

As you gain experience, you’ll add stop and stop-limit orders, which let you trade breakouts, automate exits, and manage risk more proactively.

Across MT4, MT5, desktop, and mobile, the structure is familiar: open the New Order window, choose the Order Type, set your price levels, and confirm.

The layout differs slightly, but the logic is identical — making it easy to apply what you learn, no matter which device you trade from.

New to order types? Start with the basics above and practise each one in a free AvaTrade demo account.

When to use each order type

Think of each order type as a different way to say “what you want” to the market:

• Market order – Use when you want to enter or exit now at the best available price.
  Example: News has just broken, you decide to close a position immediately and accept the current market price.
• Limit order – Use when you want a better price than the current market and are willing to wait.
  Example: EUR/USD trades at 1.1050, but you only want to buy if it dips to 1.1020, so you place a buy limit at 1.1020.
• Stop order – Use when you want to trade a potential breakout or protect yourself with a stop-loss.
  Example: Price is at 1.1050; you place a buy stop at 1.1080 to join a move higher only if momentum continues.
• Stop-limit order – Use when you want breakout-style entries or exits, but with more control over the actual fill price.
  Example: You set a buy stop at 1.1080 with a limit at 1.1085, so you do not accept a much worse price in fast markets.

Before you place any order

A quick pre-trade check can help you avoid the most common order mistakes:

• Order type & direction – Confirm whether it is a Buy or Sell, and that you have chosen the right type (market, limit, stop, stop-limit).
• Price levels – For pending orders, double-check your entry price and any attached stop and limit levels to ensure they are at the intended distance from current market price.
• Volume / position size – Make sure the lot size matches your risk plan. A small typo here can create a much larger position than you expect.
• Stop-loss (SL) and take-profit (TP) – Set SL to cap potential loss and TP to lock in desired profit; both should reflect your strategy, not just round numbers.
• Time in force – Check whether the order is set as Good ’til Cancelled or Good for the Day; incorrect settings here are a common reason pending orders expire unnoticed.

Take a moment to review the ticket before you click Place Order – ideally on a demo first – so you understand exactly how that order will behave in live market conditions.

Ready to put order types into practice? Test them in an AvaTrade demo account before you trade with real capital.