This page explains each order type in turn: market, limit and stop-entry orders, the stop-loss, the trailing stop, the take-profit, the one-cancels-the-other pair and the partial close. It ends with a worked example that places a stop by price, by distance and by risk.
Key points
- A market order fills immediately at the next available price. A limit order fills only at your price or better, so it may never fill.
- When the price reaches your level, a stop-loss turns into a market order. In a calm market, it fills close to that level. If the price jumps, it fills wherever the market reopens.
- No stop-loss caps your loss when the price gaps. What limits the damage is the size of your trade.
- A trailing stop keeps a set distance behind the price as your trade moves in your favour. When the trade reverses, the stop holds still. On some platforms it only works while the program is running.
- A take-profit closes a winning trade at a set price. A partial close shuts part of a trade, leaving the rest open.
- Your stop distance and risk amount decide the trade size between them. You work out the size after those two.
What is a stop loss?
A stop loss is an instruction to close your trade once the price reaches a level that you set on the losing side. The stop goes below the current price on a trade you bought and above it on a trade you sold. You can attach it when you open the trade, or you can add it later. The stop loss stays on your provider’s system until it’s triggered or you cancel it.
The stop price is a trigger, not a promise. The US securities regulator’s guide to share orders says that when the stop price is reached, a stop order becomes a market order (Investor.gov, Types of Orders). A CFD stop works the same way. From that point, your provider fills the stop at the next price it can give. The difference between that price and your level is slippage (how a trade works).
The side of the quote that triggers the stop matters as well. The bid is the lower sell price on every CFD, and the ask is the higher buy price. The gap between them is the spread. MetaTrader 5 checks a stop on a buy trade against the bid, and a stop on a sell trade against the ask (MetaTrader 5 help). Even when the chart’s price never touches your stop, a spread that widens for a moment can reach it.
Order types explained: market, limit and pending orders
Order types split into two categories: those that fill immediately and those that wait for a price. The first three listed here open a trade, and you can also use them to close one. The how a trade works page shows where these fit in a trade’s timeline.
- What is a market order?
- A market order is an instruction to buy or sell immediately at the next available price. Being filled is close to certain, though the price is whatever the quote happens to be when your provider processes the order. In a fast market, that may not be the price you saw when you clicked (FINRA, Order Types).
- What is a limit order?
- A limit order is an instruction to buy or sell at a set price or better. A sell limit sits above the current price, while a buy limit sits below it. Your price is protected, but the fill isn’t, because the market may never come back to your level (FINRA, Order Types).
- What is a stop-entry order?
- A stop-entry order opens a trade once the price reaches a level beyond the current one. A buy stop is placed above the market, and a sell stop is placed below it. People use it to join a move that has already started. Like a stop-loss, it becomes a market order at the trigger, so the fill can be worse than the level.
- What is a pending order?
- A pending order is any order that waits for a price, so limit orders and stop-entry orders are both pending orders. MetaTrader 5 lists six kinds of pending orders: buy limit, sell limit, buy stop, sell stop, and two stop-limit orders that place a limit order once a stop level is reached (MetaTrader 5 help). A pending order can carry its own stop-loss and take-profit, and they start working once the order fills.
Different platforms offer a varying set of these order types and name them in their own way. The trading platforms page sets out how they compare.
Why a stop loss can fill at a worse price
A stop loss can fill at a worse price than its level since the market doesn’t trade every price in between. A gap means a jump from one price to another with no trading in between. Gaps occur over weekends, at the market open, after company results and around big news. If the price opens beyond your stop, you get the first available price, and gap risk is what that danger is called.
The US brokerage regulator FINRA issues the same warning about share orders. A stop order to sell in a fast-moving market, it notes, could bring in significantly less than the stop price (FINRA, 26 March 2025). The same notice points to the opposite problem, where a short, sharp move can trigger a stop just before the price returns to where it was.
So your planned loss at the stop assumes a calm market. The actual loss can be larger. Quiet hours make it worse, since liquidity drops and fewer buyers and sellers are there to fill you close to your level. The risk management page explains what each kind of stop guards against.
Trailing stops
A trailing stop is a stop-loss that follows the price at a set distance while the trade moves your way, but stays where it is when the price turns back. On a buy trade it only ever moves up. Once triggered it behaves like any other stop, becoming a market order that can slip.
Where the trailing stop operates matters. MetaTrader 5 runs the trailing stop inside the platform on your own device, not on the server, so it stops working when the platform is off (MetaTrader 5 help). The final stop level it set remains. Some other platforms run trailing stops on the provider’s server.
The trade-off lies in the distance. A tight trailing stop gets hit by everyday price wobbles, while a wide one hands back much of the move before the trade closes.
Take profit, OCO and partial close
Take profit, OCO and partial close are the three tools for the winning side of a trade. They determine when you bank a gain and how much of the trade you close.
What is take profit?
A take profit closes your trade when the price reaches a specified level in your favour. Since it works as a limit order, it fills at your price or better and won’t slip against you. The cost is that it might never fill. The price can stop just short of your level and turn round.
What is a one-cancels-the-other order?
A one-cancels-the-other order, or OCO, is a pair of orders where filling one cancels the other. Attach a stop-loss and a take-profit to the same trade, and when either closes it, the other disappears. Some platforms also let you pair two entry orders, one above and one below the current price.
What is a partial close in trading?
A partial close lets you shut part of an open trade while the rest stays active. You might, for example, close half at a first target and hold the other half for a longer move. On MetaTrader 5 you choose to close the position and type the volume you want to shut (MetaTrader 5 help). The profit or loss on the part you closed is booked to your balance, and the margin that was held for it, the deposit your provider sets aside, is released. Because providers set a smallest trade size, a very small trade can’t always be split (pips and lots).
How to place a stop by price, distance and risk
Illustrative figures: a made-up example, not a forecast or a quote.
Placing a stop means working with three connected values: the stop price, how far away it is and the amount of money you’re risking. The numbers used here are made up. Say your account holds 2,000 and your own rule is to risk 1 % per trade. You buy an index CFD at 5,000, and one contract gains or loses 1 for each point.
- By price From the chart, pick the stop price at the level where your trade idea would be proved wrong, say 4,960. Most order tickets let you type the price directly.
- By distance You set the stop distance by subtracting the stop price from your entry: 5,000 − 4,960 = 40 points. Many tickets let you type the distance instead, and they calculate the price for you. On a currency pair, the distance uses pips, the smallest usual step in its price.
- By risk You work out your trade size by dividing your risk by the stop distance. Your risk amount is 1 % of 2,000, so 20. That gives you 20 ÷ 40 points = 0.5 per point, or half a contract. Some tickets show the loss at the stop in money as you type. A stop twice as far away, at 80 points, would mean a quarter of a contract for the same risk.
- Add the take-profit A take-profit order at 5,080 sits 80 points away. With half a contract you gain 40 if it fills, and that gain is twice the planned loss. The ratio tells you nothing about how likely either order is to be hit.
- See what a gap does Suppose bad news comes out overnight and the index reopens at 4,930. Your stop at 4,960 triggers and fills at 4,930. The loss is 70 points × 0.5 = 35, not the planned 20.
- See what a partial close does Suppose instead the price reaches 5,080 and you manually close half the trade. A quarter of a contract over 80 points banks 20. The other quarter stays open with its stop, and if you’ve moved that stop up to 5,000, the rest of the trade can no longer lose in a calm market.
The stop distance set the trade size in this example, and the risk management page works through the same sum for a currency pair. Leverage lets a small deposit hold a much bigger trade, yet it doesn’t appear in the sum at all.
Risk warning
A stop loss limits a loss but doesn’t cap it
When markets move smoothly, a stop loss limits your loss. If the price gaps, it caps nothing. If you’re a retail client and the company that opens your account is regulated in the EU, negative balance protection caps your loss at what’s in your account. That amount can be far more than the loss at your stop (ESMA ESMA Decision (EU) 2018/796). Orders don’t change the odds either. ESMA reported national regulators’ findings that between 74 % and 89 % of retail CFD accounts lost money (ESMA press release).
Common questions about stop loss and order types
Most questions about stop loss and order types are about two things: what each order promises and what it doesn’t promise.
Is a stop loss guaranteed?
An ordinary stop loss isn’t guaranteed to fill at its level. When it triggers, it executes at the next available price and that price can be worse if the market jumps (risk disclosure).
What is the difference between stop loss and take profit?
A stop loss closes a trade on the losing side at a chosen level, while a take profit does the same on the winning side. Because the stop becomes a market order, it can fill worse than its level. Because the take profit is a limit order, it fills at its price or better, or doesn’t fill at all. Put both on the same trade and each cancels the other.
What is the difference between a stop loss and a stop-limit order?
A stop loss turns into a market order at its trigger, while a stop-limit order turns into a limit order. The stop-limit protects the price, but it may not fill at all if the market jumps past the limit, and your trade then stays open (FINRA, Order Types). Many CFD platforms offer stop-limit orders only for opening trades.
Does a trailing stop work when the platform is closed?
A trailing stop keeps working with the platform closed only if it runs on the provider’s server. On MetaTrader 5, it runs within the platform on your device and stops trailing once the platform shuts down (MetaTrader 5 help). The last ordinary stop-loss level it set remains on the server.
What does partial close mean?
Partial close lets you close part of an open trade and keep the rest. The profit or loss from the closed portion is booked straight away. The margin for that part is released. The remaining trade keeps its stop-loss and take-profit levels.
Sources
The original documents this page cites, in the order they first appear.
- Types of Orders, U.S. Securities and Exchange Commission (Investor.gov)
- Basic Principles - Trading Operations - MetaTrader 5 Help, MetaQuotes
- Order Types, FINRA
- Stop Orders: Factors to Consider During Volatile Markets, FINRA, 2025-03-26
- Executing Trades - Trading Operations - MetaTrader 5 Help, MetaQuotes
- European Securities and Markets Authority, ESMA
- ESMA Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union, Official Journal of the European Union (EUR-Lex), 2018-05-22
- ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors, ESMA, 2018-03-27