What are Pending Orders and how to use them?
The financial markets work 24 hours a day, 5 days a week. It is not necessary for you to constantly monitor price movements in order to trade. You can make deals even without being in front of your computer. How? By using Pending Orders. You just need to decide whether you want to BUY or SELL, and at what price. The platform will automatically place the order when the desired price is struck.
There are two groups of Pending Orders in the Trading 212 platform: Entry Pending Orders and Associated Pending Orders. The first can be used to open a position when certain conditions are met. These include If/Then, OCO, Limit/Stop Orders.
You can close your open positions by using Associated Pending Orders. By clicking on an open position, you will view the Open Positions window. A Pending Order will appear. Just type your exit price and click Confirm.
Pending Orders that will close your position on profit are called Limits. The ones that prevent you from losing more money are called Stops: they close your position on a certain loss to prevent a further one. If you want to place both a Stop and a Limit for an existing position, you should use an OCO Order /“one cancels the other”/.
What are Pending Orders used for?
You can use Pending Orders in the following cases:
- To limit the potential loss on an open position (Stop Loss Order);
- To close your position on a certain profit (Limit Order);
- To open a new position at a certain level (Entry Stop Order).
Should I use Pending Orders?
Many of our clients choose to use Stop or Trailing Stop Orders on their open positions. Pending Orders help you manage the level of risk on your account.
Is my Pending Order execution guaranteed?
The execution price of Pending Orders is not always guaranteed.
Stop Loss, Take Profit and Trailing Stop orders are guaranteed only during market hours. If these orders have not been executed during market hours, they may be executed at a different price if the market opens with a gap*.
Limit/Stop, OCO and If/Then orders are not guaranteed when the market is volatile or not liquid. These orders may be executed at a different price than the price specified in the order.
*A market gap is the difference between the closing price of one period and the opening price of the next one. Market gaps usually occur between trading sessions, such as during the night or over the weekend.
Why is my Pending Order not executed?
It is not executed because the triggering price is not reached. Using our charts to view the price history of the instrument might be a good idea.
What is an Entry Pending Order?
An Entry Order is an order that initiates the opening of a position. It could be a Pending Order to enter the market at a prespecified price. There are two major types of Entry Orders: Limit Entry and Stop Entry Orders. Entry Orders allow you to enter the market at a more favourable price. In Trading 212, you can use Limit/Stop, If/Then and OCO as entry orders.
What is an Associated Pending Order?
An Associated Order is a Pending Order related to an already open position. An Associated Pending Order sets certain conditions, such as price/distance from the market price; when these are met, the position is closed. An Associated Pending Order closes the whole position; partial close is not available. In Trading 212, such orders are the Trailing Stop and Take Profit/Stop Loss.
What is a Take Profit/Stop Loss Order?
When creating a Take Profit/Stop Loss Order, you will have to assign a specific target price value. You will not be able to specify exact values for the Distance to the current price - its value will be automatically calculated by the platform.
What can I use Take Profit/Stop Loss Order for?
Take Profit/Stop Loss Orders are Associated Pending Orders. With a Take Profit/Stop Loss Order, you make sure that your open positions are closed at a certain market price. Thus you can control your risk and plan your trading in a better way.
Should I use Take Profit/Stop Loss Orders?
Many of our clients prefer to use them because they allow better risk management when trading.
Can I set both profit and loss values for the Take Profit/ Stop Loss Order on my open position?
Yes. You can enter both values - for desired profit and maximum loss – and when either of them is struck, your open position will be closed.