What Is a Pending Order?
Don't want to watch the screen all day? Leave an order waiting at your target price and it fills automatically when the price gets there.
Risk warning: forex, CFDs, options, futures and crypto assets usually involve leverage or high volatility, and you can lose more than you put in. This lesson only teaches the concepts; all numbers are for illustration and are not investment advice.
Key takeaways
- 1A market order fills right away; a pending order fills only when the price reaches the level you set.
- 2Pending orders let you trade to plan while you sleep or work.
- 3There are two kinds: Limit (wait for the price to come back) and Stop (wait for the price to break through).
- 4A pending order guarantees the price, not the fill: if the price never touches it, it keeps waiting until you cancel it or it expires.
Check your understanding
Get every question right to complete this lesson
1.When does a pending order become a real position?
2.Compared with a market order, what's the biggest benefit of a pending order?
3.The price is 1.0850 and you place a Buy Limit at 1.0820. The day's low is only 1.0825. What happens?
Text version · Forex: Pending Orders & Risk, lesson 1: “What Is a Pending Order?”
Don't want to watch the screen all day? Leave an order waiting at your target price and it fills automatically when the price gets there.
Market order: fills right now
A market order fills right away at the current price, but you have to be at the screen to press the button at that moment.
Pending order: fills automatically only when price gets there
A pending order is an instruction you set in advance. For example, a Buy Limit: when price drops to your target, the broker buys for you automatically.
Two kinds of pending orders: come back vs break through
A Limit order waits for price to "come back" to a cheaper (or pricier) level; a Stop order waits for price to "break through" and then follows it. A pending order keeps waiting until it fills, you cancel it, or it reaches its order expiry.
Key takeaways
- A market order fills right away; a pending order fills only when the price reaches the level you set.
- Pending orders let you trade to plan while you sleep or work.
- There are two kinds: Limit (wait for the price to come back) and Stop (wait for the price to break through).
- A pending order guarantees the price, not the fill: if the price never touches it, it keeps waiting until you cancel it or it expires.
Try it yourself
You can do these exercises in this lesson's interactive simulation:
- Press play and watch the full 24 hours: what happens at 03:00? What is A doing?
- Drag the timeline to 07:00: where is the price when A wakes up?
- Drag the order price to 1.0810 (below the day's low) and play again: does B's order still fill?
- Drag the order price to 1.0848 and play again: why does A get in this time too?
Quiz and explanations
- 1. When does a pending order become a real position?
- Answer: When the price touches the order price.A pending order is just a waiting instruction. It fills only when the price touches it.
- 2. Compared with a market order, what's the biggest benefit of a pending order?
- Answer: No screen-watching, it executes at your planned price.A pending order is a plan you set in advance.
- 3. The price is 1.0850 and you place a Buy Limit at 1.0820. The day's low is only 1.0825. What happens?
- Answer: It doesn't fill and keeps waiting.The price never dropped to 1.0820, so the order isn't triggered and keeps waiting.
Terms in this lesson
- Buy Limit: A buy order placed below the current price: you buy once price dips to a cheaper level.
- market order (Market Order): An order that fills right away at whatever price is available: the fill is guaranteed, the price isn't.
- pending order (Pending Order): An instruction set in advance at a price, which fills automatically only when the market gets there.
- order expiry (Order Expiry): When a pending order lapses: good till canceled (GTC), or only valid for the day or until a set time.