Deriv MT5 order types: Your playbook for smart trading

In this guide, we're diving into the world of order types – the different ways you can enter and exit trades. Think of it like planning a trip; different routes can get you to your destination more efficiently, depending on the conditions. 

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Two main Metatrader order types: Market orders and pending orders

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• Market orders: The quick step - When you place a market order, Deriv MT5 will execute it immediately at the best available price. It's fast and guarantees your order will go through, but you don't get to control the exact price.

For example: You want to buy 1 lot of EUR/USD. The current price is $1.1250, but by the time your order is executed, the price changed slightly, and you ended up buying at $1.1252. 

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• Pending orders: The strategic move - You tell Deriv MT5, "I want to trade, but only if the price reaches this specific level." Pending orders give you more control over your entry price, but they're not guaranteed to be filled.

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Types of pending orders on MT5

There are a few different types of pending orders, each with its own special move:

• Buy limit/sell limit: These orders let you set a target price for buying or selling. For example, "I'll buy if the price is at $50," or "I'll sell if the price is at $100." You set a price limit, and if the market hits it, your order goes through.
• Buy stop/sell stop: These orders are for catching momentum. For example, "I'll buy if the price goes above $50," or "I'll sell if it goes below $100," because you believe the price will keep moving in that direction..
• Buy stop limit/sell stop limit: This combines stop and limit orders. For example, "I'll buy if the price reaches $50, but only if it then drops to $48." This allows you to enter the market at a specific point while also controlling the price you pay

Order expiration: Setting a time limit

You can also set a time limit for your pending orders:

• Good 'til cancelled (GTC): Your order stays open until you manually cancel it or it gets filled.
• Today: The order only lasts (expires) until the end of the trading day.
• Specified: You set a specific date and time for the order to expire.
• Specified day: The order expires at the end of a specific day you choose.

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Deriv MT5 risk management tools: Stop-loss and take-profit

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These are like your safety gear. They help you manage your risk and protect your profits.

• Take-profit: This is where you lock in your profits. You set a price target, and when the market reaches it, your trade automatically closes at a profit. For instance, if you buy EUR/USD at $1.1250 and set a take profit at $1.1300, your position closes once the price hits $1.1300, securing your gains. It's like saying, "Alright, I've made money, time to cash out!"
• Stop-loss: This is your safety net. You set a price level where you're willing to cut your losses if the market goes against you. For instance, if you buy EUR/USD at $1.1250 and set a stop loss at $1.1200, your position closes if the price falls to $1.1200, minimising your losses. It's like saying, "If things go south, I'm getting out of this trade before I lose too much."

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Practice makes perfect

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The best way to get comfortable with all these order types is to take our free MT5 course which will give you an in-depth picture of these order types and practice on a free demo account. Experiment with different orders, see how they work, and find out which ones fit your trading style best.