Exploring the Order Types Available on the MT5 Platform (For Prop Firm Traders) 

Congratulations on getting your prop trading account financed! Now comes the exciting part: making expert use of the trading platform. You are probably already pleased by MetaTrader 5’s (MT5) robustness and ease of use. But let’s be honest, MT5 can seem a little complicated at first, especially when it comes to placing orders. There are many kinds of orders and it might be difficult to determine which one does what.  

Don’t worry, we’ll shortly provide a straightforward explanation. Technical language and complicated definitions are absent. The many order types in MT5 are explained simply here with a small prop firm to maintain reality. 

Why Order Types Even Matter in Prop Trading 

Before getting into the specifics, let’s discuss why order types are important to prop firm traders in the first place. When trading with your own funds, you have more options. You lose if you make a bad trade, even though it hurts. But within a prop firm setting? You’re following their guidelines. You have targets for profit, maximum loss and daily drawdown limits to meet. Each move matters. 

Knowing the various order types in MT5 trading platform enables you to manage risk, make accurate market entries and follow the rules set given by your prop firm. If you get it right, you’ll be one step closer to growing your account or earning a sum of money. If you make a mistake, you could face a reset or possibly a failed challenge. 

Let’s not let that happen. 

Market Orders:  

Let’s begin with market orders, which are the most straightforward of all.  

Get me in this trade right now at the best available price is essentially what a market order tells MT5.  

If you notice a great setup developing on the charts, you’ll probably choose this order type. The drawback? A small amount of slippage may occur, particularly in markets that move quickly. You should use market orders, however, when speed is more crucial than price, such as during a news release or when momentum is building. 

Use Case for Prop Traders: Suppose that NFP recently fell and you observe a breakout. Your setup is solid, and you want to capitalize on the momentum. You can enter the market with a market order before the move misses you. 

Pending Orders: 

Occasionally, the best transactions aren’t the ones you make right away. Perhaps you should wait for the price to reach a specific level before moving. This is where pending orders are useful. MT5 gives you four types of pending orders: 

• Buy Limit 
• Sell Limit 
• Buy Stop 
• Sell Stop 

Buy Limit – “Catch the Dip” 

Although you are optimistic about the EUR/USD exchange rate, it is currently a little too expensive. You believe it will retreat before rising. Saying “Buy it for me at a lower price—right here” is possible with a buy limit order. Perfect for dip buyers. 

Sell Limit – “Fade the Rally” 

The same concept, but in reverse. You want to sell at a higher level following a rally because you are bearish. Set a sell limit higher than the going rate and take it easy. When the price reaches your level, you are in. 

Buy Stop – “Breakout Hunter” 

When the price surpasses the current level, this one becomes active. A purchase stop will be placed as the price rises if the EUR/USD breaks through a resistance zone. Excellent for breakout traders who wish to spot the opportunity. 

Sell Stop – “Breakdown Catcher” 

This is the buy stop’s bearish twin. When an asset falls below a critical threshold, it enables you to short it. You are gambling that following the breakdown, the momentum will keep going down.  

Prop Trading Tip: For traders who are managing several pairs, pending orders are invaluable. You can plan and leave the execution to MT5, even if you are not in front of the screen. Remember to include stop-loss and take-profit levels to protect that funded account, though. 

Stop Loss Orders: Your Built-In Safety Net 

Regardless of the quality of your setup, you must have a stop loss. For a period.  

In MT5, if the market goes against you, stop-loss orders are linked to your transaction to automatically close it at a predetermined price. Like wearing a seatbelt, you’re still operating the vehicle, but if something goes wrong, this prevents you from crashing through the windshield.  

Why Prop Traders Must Take Note of This: The core of prop firms is risk management. Some even demand that stops be set up for each trade. An intelligent stop loss preserves your daily drawdown and allows you to stay in the game long enough to reach your goals. 

Pro tip: Stopping where it “feels” right is not enough. It should be based on structure, ATR, or whatever your plan requires. Otherwise, you are only thinking. 

Take Profit Orders: Lock It In 

Take-profit orders are the opposite of stop-loss orders. This closes your deal at a predetermined profit level. It is your prize for correctly determining the direction and effectively handling the trade. 

Take-profits can help you reach your profit goals in a prop company situation more quickly and with less emotional strain. You are not required to monitor the charts or be concerned about recovering your winnings.  

Do you want to step it up? Make use of several take-profit levels. With MT5, you can divide your trade and scale out gradually. You can lock in some earnings that way and let the rest ride.