Pending orders: how to use it?

What is a pending order?
A pending order is a tool that allows you to open or close positions at the desired price automatically after the price reaches the set value. This is the main difference from a market order, which is executed at the current price immediately. At the same time, pending orders differ in that if the price has not reached the set value, the order will not be executed.
Pending orders will help those who use technical analysis and do not want to constantly sit at the screen, waiting for the best entry price.

With the help of pending orders, you can not only open, but also close positions.
Stop Loss is an order that is placed in case the price does not go where the trader expected. When the price reaches this order, the position will be closed at a loss.
Take Profit is an order that will automatically close a profitable position when the price level predicted by the trader is reached.

Opening positions using limit orders
A limit order is an order to open a position at the stated price or better. To make a purchase transaction, an order is placed below the current market price, and for sale – higher. Thus, limit orders are applied when the trader expects that the price will reach a certain level, and then turn away from it in the opposite direction.
Such orders are used in situations when a trader expects a price rebound from strong levels. They are executed at a price no worse than the stated one. Execution is possible even at the best price if the value specified in the order falls into the price gap.

Buy Limit
Buy Limit is a pending order to buy (at the Ask price) below the current market price. This order is used by a trader when he expects the price to decrease to a certain value and wants to open a buy position there. For example, if the price of the GBP/USD currency pair is at 1.3880 and the trader wants to buy it from the 1.3800 level, he needs to set a Buy Limit order to this level (or maybe a little higher).

Sell Limit
Sell Limit is a pending sell order (at the Bid price) above the current market price. This order is applied if the trader expects the quotes to rise to a certain level and is going to open a sell position there. For example, if the quotes of the EUR/USD currency pair are now around 1.1750, and the trader wants to sell the asset when the price reaches the 1.1800 level, a Sell Limit order is placed at this level (or slightly lower).

Opening a position on a stop order
A stop order is a tool that allows you to open a position at the market price when the values specified in advance in the order are reached. A buy order is placed above the current price, and a sell order is placed below. Stop orders are used when a trader expects that the price, having reached a certain level, will continue to move in the same direction.

Usually this type of orders is used in strategies based on the breakdown of levels.
If there is an impulse in the market at the moment due to high volatility, there may be slippage and the order will open slightly worse than the value indicated by the trader.

Buy Stop
Buy Stop is an order to buy (at the Ask price) above the current market price. Activating an order and opening a buy position is triggered when the price rises to the specified value.

Example:
The quotes of the AUD/CAD pair are at 0.8940.
The trader expects that the growth will continue if the price breaks through the resistance level of 0.8975.
To do this, a pending Buy Stop order is placed just above this level (for example, at 0.8990).
When the Ask price reaches 0.7160, a buy position will open.

Sell Stop
Sell Stop is a sell order (at the Bid price) below the current market price. When the price reaches the desired values, the order is automatically triggered and opens a sell position.

Example:
The quotes of the GBP/JPY pair are around 160.60.
The trader expects that the pair will continue to decline if it breaks down the support level of 160.
To do this, a pending Sell Stop order is placed slightly below this level (for example, at 159.85).
When the Bid price reaches the value of 159.85, a sell position will open.

Conclusion
Thanks to pending orders, the trader has another, powerful tool that helps to use various strategies profitably, helping to increase the number of openings or closures of positions.
It becomes possible not to monitor the market 24 hours every day, but to place orders in a planned place, with fixed risks. Trading becomes almost completely automatic.