Forex Order Types: Market, Limit, Stop and OCO Explained

A forex order is an instruction to your broker to open or close a position. A market order executes at once at the current price. A pending order (buy limit, sell limit, buy stop, sell stop) waits until price reaches a level you choose. A stop-loss and a take-profit are orders attached to a position to close it at a set loss or profit.

Disclosure: OnForex may earn a referral commission from Exness links on this page. This is general education, not investment advice.

Choosing the wrong order type is a common and avoidable mistake, for example placing a "buy stop" when you meant a "buy limit". This page defines every common order, shows all four pending orders on one chart, walks through a EURUSD example, and explains what slippage and gaps do to stops.

Order types at a glance

Order	Direction vs current price	Fills when	Typical use
Market buy / sell	Now	Immediately	Enter or exit right away
Buy limit	Below price	Price falls to your level	Buy a pullback
Sell limit	Above price	Price rises to your level	Sell a rally
Buy stop	Above price	Price rises through your level	Buy a breakout
Sell stop	Below price	Price falls through your level	Sell a breakdown
Stop-loss	Attached to a position	Price moves against you to the stop	Cap the loss
Take-profit	Attached to a position	Price reaches the target	Lock in the gain
Trailing stop	Attached to a position	Price retraces from its best level	Follow a trend

A useful memory trick: limit orders wait for a better price (buy low, sell high). Stop orders wait for confirmation (buy when it breaks up, sell when it breaks down).

The four pending orders on one chart

Limit orders sit on the side where price would have to reverse to reach them. Stop orders sit on the side where price would have to continue to reach them. That is why a buy limit is below the market and a buy stop is above it, and why platforms reject a pending order placed on the wrong side.

Market orders and execution

A market order is filled at the best available price when it reaches the server. You see a bid and an ask; you buy at the ask and sell at the bid, and the difference is the spread. Spreads widen around news releases, the daily rollover and market opens, so a market order placed then costs more.

Two execution styles exist. With market execution you accept whatever the price is at the moment of fill. With instant execution you request a price and the broker may send a requote if it moved. Many retail accounts now use market execution, so slippage replaces requotes. See slippage and spread explained.

Pending orders in detail

Buy limit and sell limit

A buy limit is placed below the current price. If price falls to it, you buy. It fills at your price or better. A sell limit is the mirror image above the price.

Use them when you have a level in mind, such as a pullback into support, and do not want to chase. The risk is that price never reaches the level and runs away without you, or reaches it and keeps going.

Buy stop and sell stop

A buy stop is placed above the current price. If price rises through it, a buy order is triggered. A sell stop is placed below the price and triggers a sell on a drop.

Use them for breakouts, such as above a range high. Because they trigger on a move through a level, they are filled at the next available price, which can be worse than the one you set. This matters most during news and after weekends.

Stop-limit orders

MetaTrader 5 also offers buy stop limit and sell stop limit. When the stop price is reached, a limit order is placed instead of a market order. That avoids a bad fill but can leave you unfilled if price keeps moving.

Stop-loss, take-profit and trailing stop

A stop-loss (SL) closes a position when price moves against you by a set amount. A take-profit (TP) closes it at a target. Together they define the trade's risk and reward before you enter, and the ratio of reward to risk is called R. See risk-reward ratio and stop-loss placement.

A trailing stop moves the stop in the direction of profit by a fixed distance and never moves it back. It lets a winner run while protecting open profit. Platforms differ: some trail only while the terminal is running. Details are on the trailing stop page.

Why stop placement matters: our data

We tested a random entry on hourly data for four markets (OnForex analysis of hourly prices from Yahoo Finance, January 2024 - October 2026; gold: June 2024 - October 2026, COMEX gold futures). We asked how often a stop placed k times ATR(14) away was hit within 24 hours.

Stop distance	EURUSD	GBPUSD	USDJPY	XAUUSD
0.5 ATR	88%	88%	86%	87%
1 ATR	78%	77%	73%	74%
1.5 ATR	66%	66%	61%	62%
2 ATR	56%	56%	51%	52%
3 ATR	40%	40%	34%	35%

A 1 ATR stop was hit in 73-78% of 24-hour windows. Tight stops are not safe stops; they simply get triggered by normal movement. The order type does not fix this. A wider stop with a smaller position size does, which is covered in position sizing.

OCO, IFD and IFDOCO

Some platforms, especially in Japan and on web-based terminals, offer linked orders:

• OCO (one cancels the other): two pending orders, such as a sell limit above and a sell stop below. When one fills, the other is cancelled.
• IFD (if done): a second order is activated only after the first fills, typically an entry followed by an exit.
• IFDOCO: an entry order followed by an OCO exit pair, a take-profit and a stop-loss. This is effectively an entry, a target and a stop in one instruction.

MetaTrader 4 and 5 do not have a native OCO. In MetaTrader you attach SL and TP to the position directly, which achieves the same exit logic for most traders. Check what your own platform supports.

Order duration

A pending order can have an expiry. Good till cancelled (GTC) stays until you remove it. Day orders expire at the end of the trading day. Some platforms allow a specific date. Remove stale pending orders; an old buy stop can trigger weeks later in a completely different market.

A worked example on EURUSD

Assume EURUSD trades at 1.1167 and your account is USD 1,000. The levels below are illustrative, not a trade recommendation.

Plan A: buy a pullback with a buy limit. Buy limit at 1.1150, stop-loss at 1.1130, take-profit at 1.1190.

• Risk = 20 pips. Reward = 40 pips. That is 2R.
• With 1% risk (USD 10) and a pip value of about USD 10 per standard lot on EURUSD, size = 10 / (20 x 10) = 0.05 lots.

Plan B: buy a breakout with a buy stop. Buy stop at 1.1190, stop-loss at 1.1170, take-profit at 1.1230.

• Risk = 20 pips. Reward = 40 pips. Also 2R, same 0.05 lots.

If price drops straight through 1.1130 over a weekend and re-opens at 1.1105, a standard stop-loss fills near the open, not at 1.1130. A 20-pip planned loss becomes 45 pips, over twice the intended risk. Slippage and gaps are why a position should be sized so that a worse-than-planned fill is still survivable. This is the argument for 0.5-1% risk rather than 5-10%.

A real trade plan of this kind, in R, is on our trade plan in R example:

Slippage, gaps and requotes

• Slippage is a worse (or better) fill than requested. It rises when volatility spikes, liquidity thins or you trade size.
• Gaps occur when price opens far from the previous close, typically on Monday after the weekend. Any stop or limit inside the gap is skipped.
• A limit order fills at your price or better. A stop order becomes a market order and fills at the next price.
• A requote happens under instant execution when the price moves before the broker fills you.

Expect all of this around scheduled releases; see news trading and the economic calendar.

Common mistakes

• Confusing limit and stop. Buying a "stop" below the market is rejected or fills instantly, depending on the platform.
• No stop-loss attached. A pending order that fills without a stop leaves an open risk.
• Stops too tight. See the table above: a 0.5 ATR stop was hit 86-88% of the time in a day.
• Leaving old pending orders. Remove them at the end of your session.
• Trading the news with pending orders. A buy stop above and a sell stop below before a release looks clever, but spreads widen and both orders can fill badly.
• Ignoring weekend gaps. Size positions assuming the stop may not fill where planned.

Which order for which situation

Situation	Reasonable choice
You want to enter right now	Market order with SL attached
You want to buy a pullback to a level	Buy limit
You want to buy only if a high breaks	Buy stop
You want to protect an open profit	Trailing stop or move SL to break-even
You cannot watch the chart	Pending order with SL, TP and expiry

Whichever order you use, decide the stop first, then size the position from the stop distance, then place the entry.

Related guides

• Stop-loss placement
• Trailing stop
• Slippage
• Position sizing
• Support and resistance
• Risk-reward ratio

Risk warning: Forex and CFD trading carries a high risk of loss. Stops are not guaranteed and may fill at a worse price. This page is general education and not personal investment advice.