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Understanding Order Types
So far, we have only looked at robots that fired market orders – an order to buy or sell at the best
price available. We now look at two other order types: Limit and Stops.
Limit Orders
BuyLimit is a pending order to buy assets for a security at a price lower than the current one. The
order will be executed if the Ask price reaches or falls below the price set in the pending order.
SellLimit is a pending order to sell assets for a security at a price higher than the current one. The
order will be executed if the Bid price reaches or rises above the price set in the pending order.
Stop Orders
BuyStop is a pending order to buy assets for a security at a price higher than the current one. The
order will be executed if the Ask price reaches or rises above the price set in the pending order.
SellStop is a pending order to sell assets for a security at a price lower than the current one. The
order will be executed if the Bid price reaches or falls below the price set in the pending order.
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Coding for Pending Orders
Here are the OrderSend code for pending orders (modified from BelindaSizing). Let’s assume that I am
place orders 100 points above or below current bid and ask prices.
Buy Limit
Ticket = OrderSend(Symbol(), OP_BUYLIMIT, Lots, Ask-100, Slippage, StopLossLevel,
TakeProfitLevel, "Buy(#" + MagicNumber + ")", MagicNumber, 0, DodgerBlue);
Sell Limit
Ticket = OrderSend(Symbol(), OP_SELLLIMIT, Lots, Bid+100, Slippage, StopLossLevel,
TakeProfitLevel, "Buy(#" + MagicNumber + ")", MagicNumber, 0, DodgerBlue);
Buy Stop
Ticket = OrderSend(Symbol(), OP_BUYSTOP, Lots, Ask+100, Slippage, StopLossLevel,
TakeProfitLevel, "Buy(#" + MagicNumber + ")", MagicNumber, 0, DodgerBlue);
Sell Limit
Ticket = OrderSend(Symbol(), OP_SELLSTOP, Lots, Bid-100, Slippage, StopLossLevel,
TakeProfitLevel, "Buy(#" + MagicNumber + ")", MagicNumber, 0, DodgerBlue);
Note: TakeProfitLevel and StopLossLevel are price levels, not pips. Do make sure they reflect the correct
price levels. Eg. For a Buy Limit order at 1.2345 with 60 pips take profit and 30 pips stop loss, we
should input a TakeProfitLevel of 1.2405 and a StopLossLevel of 1.2315.
Touch and Market – From Pending to Market Orders
When the price levels of our pending orders are hit, they become market orders.
• Pending orders BuyLimit and BuyStop are modified to market ones, if the last known Ask price
reaches the requested pending order price.
• Pending orders SellLimit and SellStop are modified to market ones, if the last known Bid price
reaches the requested pending order price.
This has two implications for us:
1) We are always buying at the Ask price and selling at the Bid price. In order to buy at the Bid
and sell at the Ask price, we need a broker and platform that allows us to view and place orders
on the Order Book/Level 2 Ladder/Depth of Market (DOM). More on this in future lectures.
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2) Slippages may occur. Slippages occurs when your order gets filled at a price worse than
specified. In times of high volatility, market price may jump violently and break through your
pending order’s price. This may cause you to fill at a worse price.
From the chart above, we can see that the big downwards spike caused us to fill our order at
a worse price. When the price breaks the Sell Stop level, the order turns into a market order.
However, there are no one willing to fill our order at the Sell Stop level. In order to sell, someone
else must buy from us. In this case, the price is racing downwards. It is natural that no one
wants to buy while price is free-falling.
Hence, we fill our order at a lower (worse) price. The difference between our Sell Stop price
and the price where we filled our order is our slippage.
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