Order Types
These are the instructions you give your broker. A Market Order buys or sells immediately at the current price. Pending Orders are more strategic, telling your broker to open a trade only if the price reaches a specific level.
Pending Entry Orders
Planning your entries is a hallmark of a disciplined trader. Here are your options:
Buy Limit
An order to buy below the current price. You use this when you think the price will drop to a support level and then bounce back up.
Sell Limit
An order to sell above the current price. It's like setting a trap at a resistance level, expecting the price to rise, hit your order, and then fall.
Buy Stop
An order to buy above the current price. You use this to catch breakouts. It's like setting a tripwire above a ceiling; if the price smashes through, you want to jump on the upward momentum.
Sell Stop
An order to sell below the current price. This is for trading breakdowns. You set it below a support floor, and if the price breaks through, your order triggers to ride the downward momentum.
Use the interactive chart below to visualize these scenarios:
Buy Limit
An order to buy at a price LOWER than the current market price.
Use Case:
You believe the price will drop to a key support level and then reverse upwards.
Understanding the Why
A pending order answers the question: "I believe the price will do X, but I can't be at my screen when it happens. How can I get in the trade automatically?"
Imagine the price of EUR/USD is currently 1.1050. Here are four scenarios:
Scenario 1: The Bounce
You think the price will fall to support at 1.1020 and then reverse upwards. Use a Buy Limit order.
Scenario 2: The Rejection
You think the price will rise to resistance at 1.1080 and then reverse downwards. Use a Sell Limit order.
Scenario 3: The Upward Breakout
You believe if the price breaks above 1.1080, it will continue surging higher. Use a Buy Stop order.
Scenario 4: The Downward Breakdown
You believe if the price falls below 1.1020, it will continue crashing lower. Use a Sell Stop order.
Exit and Management Orders
Just as important as entering a trade is knowing how you'll exit—for better or for worse.
Stop Loss (SL)
Your most important risk management tool. It's an order that automatically closes a losing trade at a price you define.
Never, ever trade without a Stop Loss. It is your safety net.
Take Profit (TP)
The fun one. This order automatically closes a trade when it reaches a specific profit target, locking in your gains.
Trailing Stop
A dynamic Stop Loss that automatically moves in your favor as the trade becomes more profitable, locking in profits while still giving the trade room to grow.
Knowledge Check: Order Scenarios
Choose the right order type for each situation. Think about where price is now vs. where you want to enter.
Question 1:
EUR/USD is currently at 1.1000. You believe if it drops to 1.0950 (a support level), it will bounce back up. You want to buy at 1.0950. Which order type do you use?
Reveal answer
Question 2:
GBP/USD is at 1.2500. You think if it breaks above 1.2550 (a resistance level), it will continue rising strongly. You want to buy only if it breaks that level. Which order type?
Reveal answer
Question 3:
You bought EUR/USD at 1.1000. You want to automatically exit with profit if price reaches 1.1050, and automatically exit with a small loss if price drops to 1.0970. What two orders do you need to set?
Reveal answer
Question 4:
Why would you use a pending order instead of just watching the chart and clicking "Buy" or "Sell" when price reaches your level?
Reveal answer
Opening Your First Demo Account
Now that you understand pips, lots, leverage, and order types, it's time to see them in action. A demo account lets you practice trading with virtual money—same charts, same execution, zero risk. This is where theory becomes tangible.
We'll cover the two most popular platforms: MetaTrader 5 (MT5), the industry-standard platform used by most brokers, and TradingView, a modern charting platform with paper trading capabilities.
Why Start with Demo?
Every professional trader started on demo. It's not about whether you'll make mistakes—you will. It's about making those mistakes with virtual money instead of your savings. Spend at least 2-3 months on demo before considering real funds.
MetaTrader 5 (MT5)
MT5 is the most widely used retail trading platform. Most brokers offer it, and once you learn it, you can trade with almost any broker worldwide.
Step 1: Get MT5 from Your Broker
Go to your chosen broker's website and look for "Platforms" or "Downloads." Download their branded version of MT5 (not from the MetaTrader website directly—you need your broker's server connections). Install it on your computer or download the mobile app.
Step 2: Open a Demo Account
Register for a demo account on your broker's website. You'll receive login credentials (account number, password, and server name). In MT5, go to File → Login to Trade Account, enter your credentials, and make sure "Demo" server is selected.
Step 3: Navigate the Interface
Once logged in, familiarize yourself with the key areas:
- • Market Watch (left panel): Lists all available instruments with live bid/ask prices
- • Chart Window (center): Where you analyze price action
- • Terminal (bottom): Shows your open trades, account balance, and trade history
- • Navigator (left): Access indicators and expert advisors
Step 4: Place Your First Trade
Right-click on EUR/USD in Market Watch and select "New Order." You'll see:
- • Volume: Start with 0.01 lots (micro lot)
- • Stop Loss: Set 20-30 pips from entry
- • Take Profit: Set 20-30 pips from entry
- • Click Buy or Sell to execute
Watch your trade appear in the Terminal. See how profit/loss changes as price moves. Close it manually or let SL/TP trigger.
TradingView
TradingView offers superior charting and a cleaner interface. It's browser-based (no download needed) and has a built-in paper trading feature. Many traders use TradingView for analysis and MT5 for execution.
Step 1: Create a Free Account
Go to tradingview.com and sign up for a free account. The free tier has limitations (fewer indicators, ads) but is sufficient for learning. You can upgrade later if needed.
Step 2: Open a Chart
Click "Chart" in the top menu. In the symbol search box (top left), type "EURUSD" and select it. You'll see a live chart with drawing tools, indicators, and timeframe options along the top.
Step 3: Enable Paper Trading
At the bottom of the chart, click the "Trading Panel" tab. Select "Paper Trading" from the broker dropdown. This gives you $100,000 in virtual funds to practice with. You can reset this balance anytime.
Step 4: Place Your First Trade
With Paper Trading selected, click the "Buy" or "Sell" button in the trading panel. Set your:
- • Quantity: Start small (1,000 units = 0.01 lots)
- • Stop Loss: Click "SL" and set a price level
- • Take Profit: Click "TP" and set your target
Your position will appear on the chart with visual SL/TP lines you can drag to adjust.
Which Platform to Use?
Use both. Learn MT5 because that's what you'll likely use with real money (most brokers require it). Use TradingView for its superior charting and analysis tools. Many professional traders analyze on TradingView and execute on MT5.
Your First Week on Demo
Don't just place random trades. Use this structured approach:
Days 1-2: Platform Familiarity
Open and close 10-20 trades just to get comfortable with the interface. Practice market orders, limit orders, and stop orders. Learn to modify and close positions. Make mistakes now—that's the point.
Days 3-4: Observe Price Action
Watch how EUR/USD moves during different hours. Notice the spread widening during low-liquidity times. See how fast price moves during news events. Don't trade—just observe and learn the rhythm.
Days 5-7: Structured Practice
Place trades with a simple rule (e.g., "buy when price touches this support level"). Always use stop losses. Track every trade in a spreadsheet: entry, exit, reason, result. This habit will serve you forever.
Common Demo Mistake
Don't treat demo money as "not real." Trade demo exactly as you would real money—same position sizes, same risk per trade (1-2%), same emotional discipline. If you trade recklessly on demo, you'll do the same with real money. Build good habits now.