How to Place Trades in MT4 (Market, Limit, Stop Orders)

Upon first accessing MetaTrader 4 (MT4), you may feel overwhelmed by the charts, the numbers, and the buttons. And while a lot is going on, MT4 is fundamentally just the same as anything else you would use to buy and sell assets. Once you feel comfortable placing trades - either by buying or selling at the current market price or by placing a pending order for a future trade - you will feel much more at ease navigating the platform.

Let's go through the three key order types when placing trades in MT4: market, limit, and stop orders.

Order Window

There are a number of ways to open a trade in MT4. The most common way is to locate and click the "New Order" button in the toolbar or to press F9 on your keyboard. You can also right-click on a chart or on the symbol in the Market Watch window, and select "New Order."

You will see an order window pop up, where you will have your asset (EUR/USD for example), the amount you wish to trade (lot volume or size), and what type of order you wish to place.

Market Orders - Trade Now

A market order is the easiest to understand. It is a trade that will be executed at the next available market price. Its akin to saying "I want to buy or sell right now!"

For example - if EUR/USD is trading at 1.0750 and you click Buy, your position will be opened immediately at that price or very, very close to it. Market orders are perfect when you do not want to wait for a specific level and would like to get in without hesitation.The risk is the possibility of slippage—when markets are moving rapidly, the price can slightly shift between the time you click to enter the trade, and you receiving a trade execution.

Limit Orders - Wait Until You Get a Better Price

A limit order is a pending order. Instead of entering the market right now, you are essentially telling MT4 to open your trade once the price is at a better level. There are two main categories:

Buy Limit: You want to buy to enter lower than where price currently is.

Sell Limit: You want to sell to enter higher than where price currently is.

Example: EUR/USD is trading at 1.0750. You think the market might dip to 1.0720, and then go higher. You place a Buy Limit at 1.0720. The trade only goes live once we hit that lower price.

Limit orders are ideal for you if you think that the market will pull back before it runs in your direction.

Stop Orders - Ride the Follow Through

Stop orders operate differently than limit orders. They are for traders who want to enter after the price has moved, often during a breakout price movement. 

Buy Stop: You want to buy to enter higher than where price currently is.

Sell Stop: You want to sell to enter lower than where price currently is. 

Example: EUR/USD is currently trading at 1.0750, and you think if it breaks 1.0780, it will continue to go up. You place a Buy Stop at 1.0780.Your trade only starts if the breakout occurs.

Stop orders allow you to feel the momentum rather than waiting for a pullback. 

Quick Review of Order Types  

Don't Forget Your Stop-Loss and Take-Profits

No matter which order type you use, everyone should always set a stop-loss and take profit. These are risk management tools that will automatically close your trade for a loss or gain at the level you choose. 

For example, you buy at 1.0750, set a stop-loss at 1.0720 (risking 30 PIPS) and take profit at 1.0810 (gaining 60 PIPS). Before the trade occurs, it will look like you have a plan. 

Managing orders in Terminal

After you place your trade you can view it in the Terminal window, at the bottom of MT4. The Terminal window is where you can view open trades, change a stop-loss or take-profit, or close a position. Pending orders, if not yet executed, will also be viewable from this location, and can be modified or deleted at any time. 

This allows you flexibility, if the market does not move exactly as you imagined. 

Everyday Lifestyle Analogy

Think of it in terms of shopping: 

- Market order - buying the item right away at the sticker price

- Limit order - “let the shop keeper know I won't buy unless the price is lower

- Stop order - If demand pushes the price higher, I want to tip toe in. 

This analogy, though very simple, makes the three orders types much easier to remember. 

Final Thoughts

Executing trades on MT4 is not nearly as overwhelming as it appears. Market orders let you enter the trade, limit orders let you wait for a earlier price, and stop orders help you enter the break-out. They all have places, but you will need to know each one fits into the strategy. 

Please remember, separate your trades with proper risk management. Once you become familiar and practice placing and modifying orders in MT4, it will feel as easy as you do in slowing down your rate of reading a chart. 

If you want to keep acquiring thorough guidance on ETFs, strategies and trading, go to the Learn section on Wikilix.