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Pending Orders Pending Orders Explained At CAPEX.com

Welcome to our guide to pending orders. The perfect way to see how you can minimize losses and maximize returns through the CFDs you can trade at the CAPEX online broker site!

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Roy Connor
Author:
Roy Connor
Last Updated on:
05/12/2024
Topic:
Trading
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Why pending orders are so important

Pending orders offer excellent ways to stay in control of your investment portfolio. A good knowledge of pending orders is essential for managing assets ranging from stocks and Forex pairings to commodities and bonds. You could set up a pending order to sell Apple stock once its market value hits a certain level.

Or you could set up a pending order to buy Bitcoin once its value dips to reach a specific price. This means that you can come to our CAPEX site and set up pending orders for the CFDs we feature for thousands of assets. All you need to stay in control of your online trades.

Your guide to pending orders

Pending orders are tools that you can use to automatically execute a trade for you. They are found on most online trading platforms and can buy or sell an asset once the market has reached your stated criteria.

There are many different kinds of pending orders that you can use to trigger a sale or a purchase. Some of these are activated once an asset’s value reaches a minimum value, and other orders are activated once the price hits a maximum value. All of which will help you to maximize your returns and minimize your losses when enjoying online trading.

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What are pending orders?

Traders use pending orders to automatically execute their trades for them once the value of the asset reaches a certain level. This means that you can set your trading platform to automatically buy a certain asset when it dips below a maximum price. Or you could set an order that makes your trading platform sell a specific asset when the market value hits a minimum price.

All of these pending orders can be set up so that they can be executed without you having to be present. As such, pending orders are hugely useful when buying and selling all of the CFDs available at CAPEX. You could set a pending order to buy Amazon stock when it goes below a maximum price set by you, or set an order to sell commodities like cocoa when it reaches a minimum price.

Why are pending orders useful?

Pending orders are hugely useful as you direct the broker to execute a trade when specific market conditions have been reached. This means that you don’t necessarily have to be present when the trade is finally executed. Such an approach is different to market orders where an instruction to trade is carried out instantly.

We should note that pending orders are also useful in that they avoid slippage. This is where the value of an asset changes in the time it takes for you to put in your order to buy or sell. Such slippage can often be found in market orders.

Flexibility is also a key part of the appeal of pending orders. You’ll find them used by day traders and trend strategy traders alike, and you can set up a pending order in a matter of seconds on the trading platforms at CAPEX.

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Reasons why pending orders might not be right for you

While pending orders are useful, they do have their own limitations. One of the major disadvantages of using a pending order is that your buying or selling criteria might never be met.

Let’s imagine that you came to CAPEX and set up a pending order to buy one of the stocks in the S&P 500, like an Apple stock CFD, once its value dipped below $130. While the Apple stock came close to that figure, it never triggered the pending order and you wouldn’t gain the asset. Above all, a pending order lacks the human intuition to know when it might be good to improvise and make that trade.

Knowing which kind of pending order to use

Different kinds of pending orders can be used in different situations according to your trading needs. Make sure that you thoroughly research the analytical tools available on your trading platform so as to take advantage of how each pending order works.

CAPEX hosts our own WebTrader, along with the powerful MetaTrader 5 trading software. Both of which include a wealth of tools that can help you identify the trends of hundreds of CFD assets.

Plus we feature a demo trading account that can help you get to grips with how pending orders work without you risking your own money. There are several kinds of pending orders, but most newcomers to online trading will start with buy and sell stop orders, and buy and sell limit orders. Take a look below at how these pending orders work.

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Buy limit and sell limit orders

Putting buy limits into action

Buy limits are great to use when you think that the market might react in a bullish manner towards a particular asset. Let’s say that the price of Bitcoin was at $40,000 and you thought that it might fall to $39,000 and then rally.

Here is where you could put a buy limit in place which would execute a trade at CAPEX for a Bitcoin CFD when the market price was $39,000. If the market followed your prediction, then you’d make a good return upon your investment. Obviously, things wouldn’t go quite so well should the value of Bitcoin keep plummeting.

Understanding how a sell limit works

Sell limits work in the opposite way to buy limits. Let’s imagine that Facebook stock was trading at a price of $340. You thought that the price of the stock would rise to $350 and then sink back down to its original figure. This is the place where you could come to CAPEX, fire up your trading software and set a sell limit that would short the Facebook stock at $350.

 

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Buy stop and sell stop orders

What is a buy stop?

Buy stop limits are perfect when you’re anticipating the overall direction of an asset’s value. Say that you wanted to buy CFDs in Tesla stock at CAPEX. The stock was currently trading at a market price of $650, but you thought that it would keep rising.

This is where you might want to put down a buy stop order at $660. As such, you’ll know that your trading software only bought Tesla stock once the market price was affordable.

Times to use a sell stop order

Sell stop orders will initiate a short trade when the value of an asset is below the current price. So if you came to CAPEX and wanted to trade the CFD for an index like the S&P 500, you could set a sell stop order that would make sure that the sale never went ahead once the market price had dipped below a certain level. All of which would ensure that each short trade you made gave you a decent return on your investment.

You can learn more by reading our article on “buy limit vs. buy stop.”

Conclusion – Start using pending orders at CAPEX

Pending orders are a wonderful way to save time when trading. You can simply set up your pending order and let it do its work safe in the knowledge that you won’t miss a certain sale or purchase. Plus the way that pending orders work means that you won’t have to deal with slippage suffered when you sometimes make standard market orders.

As long as you factor in the risk that’s common to all trading as well as the fact that pending orders sometimes miss decent value trades, then you’ll find pending orders to be essential parts of online trading. So make sure that you sign up to CAPEX and let our pending orders do the hard work for you!

Pending Orders – FAQ

What types of pending orders are there?
What MetaTrader pending orders are there?
Which pending orders are best for Forex trading?
How long do pending orders take to work?
What is the pending orders definition?
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