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Placing pending orders is a fundamental part of trading that allows traders to trigger orders when certain market conditions are met. One of the most popular types of pending orders is the BUY LIMIT order. This article will walk you through how to place a BUY LIMIT order on the MT4 or MT5 platform, using a practical example with the GBP/USD currency pair.
Please watch my video with detailed instructions:
What is a BUY LIMIT Order?
A BUY LIMIT order is a pending order used when a trader wants to buy an asset that is lower than its current market price. In other words, the order is set below the current market price and gets triggered only when the asset’s price falls to the specified level. This is useful when you believe the asset’s price will drop to a certain level, rebound, and rise afterward.
For example, if the current price of GBP/USD is 1.3200, but you believe it will fall to 1.3000 before rising again, you would place a BUY LIMIT order at 1.3000. Once the price reaches 1.3000, your order will be automatically executed, and you will be in an extended position (buying the asset).
Steps to Place a BUY LIMIT Order on MT4 or MT5
The process of placing a BUY LIMIT order on MT4 and MT5 is very similar, with only minor differences in the interface. Here’s how you can do it step by step.
Step 1: Open the MT4 or MT5 Trading Platform
Ensure you are logged in to your MT4 or MT5 trading platform with your live or demo account. Make sure you have sufficient funds in your account to execute the trade.
Step 2: Open a New Order Window
- On the MT4 platform, click the ‘New Order’ button in the toolbar or press the F9 key on your keyboard.
- On the MT5 platform, click the ‘New Order’ icon or right-click on the asset chart you want to trade (e.g., GBP/USD), then select ‘Trading’ and ‘New Order.’
This will open a new order window where you can input your trade details.
Step 3: Select the GBP/USD Pair
In the ‘Symbol’ section of the order window, select GBP/USD from the drop-down list if it’s not already selected. This ensures that you are placing the order on the correct asset.
Step 4: Choose Order Type: Pending Order
Once the order window opens, change the ‘Type’ from Market Execution to ‘Pending Order.’ This will enable the pending order options, which include BUY LIMIT, SELL LIMIT, BUY STOP, and SELL STOP.
Step 5: Select BUY LIMIT
Under the ‘Pending Order Type’ drop-down, choose BUY LIMIT as the order type.
Step 6: Set the Entry Price (1.3000)
In the ‘Price’ field, enter the price you want to place your BUY LIMIT order. For this example, we will use 1.3000, meaning you believe GBP/USD will fall to 1.3000 before reversing upward.
Step 7: Define Volume (Lot Size)
In the ‘Volume’ field, specify your trade size in lots. For instance, if you wish to buy 0.1 lot (equivalent to 10,000 units of GBP/USD), enter 0.1 in this field.
Step 8: Set Stop Loss and Take Profit (Optional)
You can also set a Stop Loss (SL) and Take Profit (TP) level at this stage:
- Stop Loss: This is the price at which you want to exit the trade if the market moves against you. For example, you can set your Stop Loss at 1.2900 to limit potential losses.
- Take Profit: This is the price at which you want to close the trade to secure profits. For instance, you could set the Take Profit level at 1.3200 if you anticipate the price will reach that level after hitting 1.3000.
Step 9: Set Expiration (Optional)
If you want your BUY LIMIT order to expire after a specific time if it hasn’t been executed, you can set an Expiration Date and Time. If you don’t set an expiration date, the order will remain active until it is executed or manually canceled.
Step 10: Place the Order
Once all the details are filled in, click ‘Place’ on MT4 or ‘Place Order’ on MT5 to confirm your BUY LIMIT order. Your order will now be visible in the ‘Trade’ tab (MT4) or ‘Toolbox’ tab (MT5).
GBP/USD BUY LIMIT Example at 1.3000
Let’s use a practical example using the GBP/USD currency pair.
- Current Price: 1.3200
- BUY LIMIT Entry Price: 1.3000
- Volume: 0.1 lot
- Stop Loss: 1.2900
- Take Profit: 1.3200
In this scenario, you expect the GBP/USD to drop from 1.3200 to 1.3000. Once it reaches this level, your BUY LIMIT order will be executed, and you will enter the trade. If the market moves against you, your Stop Loss at 1.2900 will limit your losses, while your Take Profit at 1.3200 will lock in gains if the price rises as expected.
Monitoring and Managing the Trade
After placing the BUY LIMIT order, you can monitor its status in the ‘Trade’ tab (MT4) or ‘Toolbox’ (MT5). Once the price hits 1.3000, the order will automatically trigger, and you’ll see the trade active. You can modify or close the trade anytime by right-clicking on the order and choosing ‘Modify’ or ‘Close.’
Conclusion
Placing a BUY LIMIT order on MT4 or MT5 is a simple but powerful way to buy an asset at a predetermined price, especially when you believe the price will dip before reversing in your favor. Following the steps outlined in this article, you can easily place a BUY LIMIT order and set yourself up for potential profits on trades like the GBP/USD example.
Whether you’re a beginner or an experienced trader, understanding how to use pending orders like BUY LIMIT can help you optimize your trading strategy, manage risk, and take advantage of market opportunities without constantly watching price movements.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
