Order Types in CFD Trading: What Every Trader Should Know

Key Takeaways:

• Choosing the right order types is one of the simplest ways to control risk and improve trade execution.
• The five main order types: market, limit, stop, stop-limit and trailing stop, each serve a specific purpose in CFD trading.
• In 2024, an estimated 19 million retail traders globally engaged in CFD trading, and most placed their orders through MetaTrader 4 or MetaTrader 5 platforms.
• Stop-loss and take-profit orders are not optional extras. They are the foundation of consistent risk management.

Why Order Types are Important in CFD Trading

Most new traders think the hard part of CFD trading is picking the right direction. They watch a chart, decide gold is going up, click buy, and hope for the best. But the click is only half the trade.

How you enter the market, where you place your stop, and how you lock in profit are decisions made through order types. Get them right and you stay in the game. Get them wrong and even a correct market view can turn into a losing month.

This guide breaks down the order types every CFD trader should know. We will look at what each order does, when to use it, and how it behaves on a MetaTrader 4 or MetaTrader 5 platform. You will see worked examples, simple calculations, and practical pro-tips you can apply on your next trade.

What Is CFD Trading? A Quick Refresher

Before we get into order types, let us cover the basics. What is CFD trading? A Contract for Difference, or CFD, is a financial agreement to exchange the difference in price of an asset between the time you open and close the contract. You never own the underlying asset. You simply trade on its price movement.

CFDs let you go long or short on forex pairs, indices, commodities, shares and even cryptocurrencies. You can profit whether prices rise or fall, and you can use leverage to control a larger position with a smaller deposit.

The numbers tell the story of how popular this market has become. The global CFD broker market was valued at USD 1.42 billion in 2026, projected to USD 2.5 billion by 2035 at 6.5% CAGR. Meanwhile, over 78% of trades are now executed via mobile apps. In 2024, Forex CFDs alone account for nearly 55% of all retail CFD trades. With this much capital flowing through the market, the trader who understands order execution has a real edge.

What Are the 5 Types of Orders Used in CFD Trading?

Let us answer the most common question first: what are the 5 types of orders you will use day to day on a MetaTrader platform? They are market orders, limit orders, stop orders, stop-limit orders, and trailing stops. Each one tells your broker something different about how and when to execute your trade.

Below is a quick reference, then we will unpack each one with examples.

1. Market Orders: The Fastest Order Types

A market order is the simplest of all order types. You instruct the platform to buy or sell right now, at whatever price the market is currently offering. On MT4 or MT5, this is the default click when you tap Buy or Sell.

When to use it:

• You want immediate trade execution and the price you see is acceptable.
• You are exiting a losing trade quickly.
• You are trading a highly liquid pair like EUR/USD where slippage is minimal.

Quick example:

EUR/USD is quoted at 1.0850 / 1.0851. You hit buy. You are filled at 1.0851 (the ask). The trade is open instantly. The trade-off is that during news releases, the price you click and the price you get can differ. This is slippage, and it affects all market orders.

Pro tip: Avoid market orders in the seconds around major news such as Non-Farm Payrolls or central bank decisions. Spreads widen and slippage spikes. Use limit orders instead.

2. Limit Orders: For Patient, Price-Sensitive Order Types

A limit order tells the broker to fill your trade only at a specific price or better. A buy limit sits below the current price. A sell limit sits above it. The platform waits until price reaches your level, then executes.

Common uses include:

• Buying a pullback to a support level you have identified.
• Selling into a rally at a resistance level.
• Setting up trades while you sleep, especially across different time zones.

Worked example:

Gold (XAU/USD) is trading at $2,650. You believe $2,635 is strong support. You place a buy limit at $2,635 with a stop at $2,628 and a take profit at $2,660. If price dips to $2,635, you are in. If it does not, no harm done. You did not chase the trade.

3. Stop Orders: The Order Types Behind Risk Management

A stop order turns into a market order the moment price hits your trigger level. It has two main jobs in CFD trading: catching breakouts and protecting capital.

As an entry order:

• A buy stop is placed above the current price, used to enter once the market breaks resistance.
• A sell stop is placed below the current price, used to enter on a confirmed breakdown.

As a protective tool, the stop-loss order is the single most important risk management tool in your kit. Industry research is sobering: roughly 74% of retail CFD accounts incur losses. A consistent reason is the absence of a defined exit. Without a stop-loss order, a small mistake can become an account-ending event.

Calculation example:

You buy 1 lot of EUR/USD at 1.0900. You set a stop-loss at 1.0850, which is 50 pips away. With a standard lot, each pip is roughly $10. Your maximum risk on this trade is 50 x $10 = $500. Now you know exactly what you stand to lose before you click confirm.

4. Stop-Limit Orders: The Hybrid Among Order Types

A stop-limit order combines the trigger of a stop with the price control of a limit. Once the stop level is hit, the system places a limit order at your specified price rather than filling at any available price.

Why use it?

• To avoid the bad fills that come with slippage during volatile sessions.
• To enter a breakout only if it occurs within a specific price range you consider valid.
• To exit a position with a guaranteed minimum price.

The trade-off is real: if the market gaps past your limit price, the order will not fill at all. You may avoid a poor price but get left with an unprotected position. For this reason, many traders use stop-limit orders for entries but stick with plain stop-losses for protection. The certainty of an exit is usually worth a few pips of slippage.

5. Trailing Stops: The Smartest of the Order Types for Trends

A trailing stop is a stop-loss that moves with you. You set a distance, say 30 pips, and as price moves in your favour, the stop trails behind by that same distance. If price reverses by your trail amount, the trade closes and you keep the locked-in gain.

Worked example with calculation:

• Buy GBP/USD at 1.2700 with a 30-pip trailing stop. Initial stop is at 1.2670.
• Price climbs to 1.2750. Your trailing stop moves up to 1.2720.
• Price climbs to 1.2780. Your trailing stop moves up to 1.2750.
• Price reverses to 1.2750. The trade closes with a 50-pip gain rather than the breakeven you would have got at the original stop.

Trailing stops are particularly useful for swing traders riding strong trends. A note of caution: in choppy markets, they can stop you out early. Match the trail distance to the asset’s typical price volatility.

Pending Order Types vs Market Orders: When to Use Which

Beyond the five core order types, traders often categorise orders into two practical groups: market orders for now, and pending orders for later. Pending orders include limits, stops and stop-limits. They sit on the broker’s server until conditions are met.

Use a market order when:

• Speed matters more than price.
• Spreads are tight and the asset is liquid.
• You are managing an open position and need to act now.

Use a pending order when:

• You have a clear technical level in mind and are not glued to the screen.
• You want to remove emotion from your entry decision.
• You trade across sessions and need automation, especially in Asia-Pacific time zones where major moves happen overnight.

This is one reason mobile-first trading has surged. Estimated more than 78% of CFD trades are now executed on mobile apps. Pending order types let traders set their plan and step away from the screen with confidence.

Stop-Loss and Take-Profit: The Order Types You Should Never Skip

If there is one habit that separates consistent traders from the 74% who lose money, it is disciplined use of stop-loss and take-profit orders. These are not advanced order types. They are basic survival tools.

A simple framework that works:

Pair every stop-loss with a take-profit at a sensible risk-reward ratio. A minimum of 1:2 means for every $1 you risk, you target $2. Even with a 50% win rate, that ratio keeps you profitable over time.

Actionable Steps for Using Order Types on MT4 and MT5

MetaTrader 4 and MetaTrader 5 remain the platforms of choice for the vast majority of CFD traders worldwide. Both support every order type we have discussed. Here is how to use them effectively.

Step-by-step setup:

1. Open the New Order window with F9 on desktop, or tap the trade icon on mobile.
2. Choose Instant Execution for market orders, or Pending Order for limits and stops.
3. Always populate the Stop Loss and Take Profit fields before clicking Place. If they are blank, you are flying without a parachute.
4. Use the One-Cancels-Other (OCO) logic by setting both a take-profit and stop-loss when you open the trade.
5. On MT5, take advantage of the additional buy stop limit and sell stop limit pending order options for tighter entries.

Pro tips from experienced traders:

• Set alerts at key levels even when you have pending orders in place. Markets change, and so should your plan.
• Review your trade history weekly. Look at where stops were hit and ask if the placement was technical or arbitrary.
• Use the History tab to calculate your average win, average loss and expectancy. Numbers do not lie.
• Trade during your local high-liquidity sessions. Asia-Pacific traders often see best execution during the London-Asia overlap.

Common Mistakes Traders Make with Order Types

Even with the right order types available, traders trip themselves up with avoidable mistakes. Here are the recurring patterns.

• Moving stops further away when a trade goes against them. This turns a planned small loss into a large one.
• Skipping stop-loss orders entirely on what feels like a ‘sure thing’. Markets do not care about feelings.
• Using market orders during low-liquidity periods, like the Sunday open, when spreads are widest.
• Setting trailing stops that are too tight for the asset’s natural volatility, leading to constant early exits.
• Forgetting to update pending orders when the market structure changes, leaving stale levels live for days.

Choosing a Broker That Supports the Order Types You Need

Not every broker offers the same execution quality across order types. Liquidity providers now support over 90% of CFD trades, and tight spreads of around 0.6 pips on major forex pairs have become an industry benchmark. When evaluating a broker, focus on these factors:

• Full support for market, limit, stop, stop-limit and trailing stop orders.
• Both MT4 and MT5 platforms with mobile, desktop and web access.
• Negative balance protection on retail accounts.
• Transparent spreads and execution policies, with no requotes on standard order execution.
• Regulatory oversight in your trading region.

VT Markets supports every order type covered in this guide on both MetaTrader 4 and MetaTrader 5, with execution speeds engineered for fast-moving markets and spreads that suit both new and active traders.

Frequently Asked Questions (FAQs)

Q1: What are the 5 types of orders most CFD traders use daily?

The five core order types are market, limit, stop, stop-limit and trailing stop. Market orders execute instantly. Limits and stops are pending orders that wait for a price level. Stop-limits combine both, and trailing stops follow price to protect open profit. All five are available on MetaTrader 4 and MetaTrader 5.

Q2: Should I always use a stop-loss order?

Yes. A stop-loss is the single most effective tool for capital preservation. Without one, a single bad trade can wipe out weeks of gains. Treat the stop-loss as part of opening any position, not an optional extra.

Q3: What is the difference between a stop order and a stop-limit order?

A stop order becomes a market order once triggered, so it fills at the next available price. A stop-limit becomes a limit order once triggered, so it only fills at your specified price or better. The stop-limit gives you price control but risks not filling at all if the market moves quickly past your limit.

Q4: Can I use trailing stops on MT4?

Yes, but with one important caveat. Trailing stops on MT4 only function while the platform is open and connected to the server. On MT5, server-side trailing stops are more reliable, especially for traders who do not keep the platform running 24/7.

Q5: Which order types are best for beginners?

Beginners should focus on market orders for entry, paired with stop-loss and take-profit orders for exit. Once you are comfortable, add limit orders to plan entries at better prices. Save stop-limits and trailing stops for when you have a consistent strategy and a trade journal to track results.

Start Trading Smarter with the Right Order Types at VT Markets

Mastering order types is not glamorous, but it is what separates traders who last from those who do not. Every successful CFD trader, from the cautious beginner to the seasoned professional, builds their edge on the same foundation: clean entries, disciplined stops, and protected profits.

Whether you are placing your first market order or fine-tuning a trailing stop strategy on a major trend, the platform you trade on matters. With VT Markets, you get full access to every order type we have covered, on both MetaTrader 4 and MetaTrader 5, with the execution speed and spreads needed to put strategy ahead of luck.

Open your VT Markets live account today and trade CFDs with the order tools the professionals rely on.