What is Difference between Market Order?

There are different types of trader orders which a trader can use to trade in Indices.

At the foundation of successful indices trading is making use of the correct order for the correct purpose. The most important things to remember about is orders: Always understand the orders you place and never place a order which as a trader you are not entirely knowledgeable about. Definitions of the commonly used types of orders:

Limit Order and Stop Order

Indices Market Order

Market order is the most basic type of order, market order is used to buy or sell at current ask or bid quote price. This refers to the quoted stock price which pops up on your platform.

This type of order is used for buying or selling according to the current exchange rate quotation in indices trading, the execution is instant. The min you want to enter a trade you can buy & sell at the current stock price at a click of a button using a market order.

Pending Orders

These are orders used to open a new trade transaction after the market reaches a price specified by the trader.

Entry orders are used to buy or sell when price when it attains a certain price target.

When a specific price level is reached or broken then a pending trade order is executed.

These Pending Orders are used to enter a trade at a specified stock price level. It's almost impossible to monitor the market every second and this is why a order can be used by a trader. If you feel the stock market price may take a certain action, such as break through a specific price level that it has been touching but it hasn't been able to break, you would want to use an Pending Order. Once the market crosses your specified stock price level, your pending order trade order will then be executed.

There are two types of pending orders - stock indices limit order and indices stop order.

Limit Order

An order to buy or sell at a specific limit.

An stock indices limit order can be used to buy below the current stock price or sell above the current price.

When buying, stock indices limit order is executed when the price falls to your limit area.

When selling, stock indices limit order is executed when the price rises to your limit area.

These Limit Orders are placed by traders when they expect the market to bounce back after reaching the retracement stock price level at which the limit order was placed.

Buy Limit Order Specifies to buy at a level below the current stock market price

Sell Limit Stock Order Specifies to sell at a level above the current stock market price

Stop Stock Order

A indices stop order is a pending order that is used to buy above the current stock price or to sell below the current price.

When buying, indices stop order is executed as the market goes up & hits buy stop level.

When selling, indices stop order is executed as the market moves down and hits the sell stop level.

• Buy Stop Order Specifies to buy at a level above the current stock market price.

• Sell Stop Order Specifies to sell at a level below the current stock market price.

What's the Difference between Stop Stock Orders and Limit Stock Orders in Indices Trading?

How to Differentiate Between Stop Orders and Limit Orders

Stop orders are set to buy above or to sell below current market price

Limit orders are set to buy or sell at a better stock price after a price retracement.

It's easier to first of all remember one concept. The easier concept is that of Stop Orders - Stop Orders are set above and below the prevailing market price.

To learn how to set up these pending orders read the guides:

Setting up Buy Limit Order and Sell Limit Order in Meta Trader 4

Setting up Buy Stop Trade Order and Sell Stop Order in Meta Trader 4

What's Difference between Market Order - Stop Order and Limit Order