What is a Pending Order? A Beginner’s Guide to Using Buy Limit and Sell Stop Commands

Learn How to Use Pending Orders

To trade with discipline and reduce the risks of emotional decision-making, new investors should understand and accurately apply Pending Orders—or pre-set trading instructions. In particular, the Buy Limit and Sell Stop orders are essential tools for building an effective trading strategy. Learning how to place Buy/Sell orders in advance allows you to access the market and manage your investments smartly, even when you’re away from the screen.

Read more about Buy/Sell and other essential trading terms

What Is a Pending Order?

A Pending Order is a pre-set instruction to buy or sell an asset at a specific price level that the market hasn’t reached yet. Once the market price moves to the level you’ve specified, the system will automatically trigger the order—no need for you to monitor the screen constantly.

The main advantage of using Pending Orders is that they help you plan your trades more systematically. You can set your entry points in advance based on your strategy, and if the market never reaches your desired price, you can also assign an expiration date to the order.

There are two main types of Pending Orders: Limit Orders and Stop Orders. ¹

What Is a Limit Order?

A Limit Order is a pre-set instruction to buy or sell an asset at a specific price or at a better one. The order will only be executed if the market reaches your specified level—otherwise, it remains pending. This type of order is ideal for traders who want to enter the market at a potential reversal point. There are two types of Limit Orders: Sell Limit and Buy Limit.

What Is a Sell Limit?

A Sell Limit is an order to open a sell position when the price rises to a specific level—one that must be higher than the current market price. Once the price reaches that level, the system will execute the order at your set price or better. However, in some cases, the order may be only partially filled if there isn’t enough market liquidity at that price.

• Example of a Sell Limit Order

If you analyze that gold is likely to face resistance at $3,350 per ounce and expect the price to reverse downward at that level, you can place a Sell Limit order at $3,350. Once the market price of gold reaches this level, the system will automatically open a sell order for you. If the price then drops as anticipated, you can profit from the sell position opened at that key level.

What Is a Buy Limit?

A Buy Limit is used to open a buy order when the price drops to a specified level—one that must be below the current market price. This type of order can only be placed at a price lower than the current market level. Once the price reaches that point, the order will be executed at the set price or better. However, the order may be partially filled if there isn’t enough trading volume available at that price.

• Example of a Buy Limit Order

If you analyze that Apple Inc. (AAPL) stock has support around $190 per share and expect the price to bounce back from that level, you can place a Buy Limit order at $190. When the stock price drops to your specified level, the system will automatically trigger a buy order. If the price rebounds as anticipated, you’ll have the opportunity to profit from entering the market at that low point. ²

What Is a Stop Order?

A Stop Order is a pre-set instruction that becomes a market order once the price reaches a specified level. This type of order may be executed at a worse price than the one set, since the system sends it as a market order the moment the trigger price is hit. Stop Orders are commonly used when you expect the price to continue moving in the same direction—such as when breaking through a support or resistance level. There are two types of Stop Orders: Buy Stop and Sell Stop.

What is a Buy Stop Order?

A Buy Stop is an order used to open a buy position when the price rises to a level above the current market price. This type of order can only be placed at a price higher than the current market level. Once the market moves up and hits the specified level, the order is triggered immediately and may be executed at the set price or higher, depending on market conditions at the time. Like all Stop Orders, it will be executed based on the available funds in your account and the liquidity in the market at that moment.

• Example of a Buy Stop Order

If you analyze that the EUR/USD currency pair is likely to break through resistance at 1.0900 and expect the price to continue rising afterward, you can place a Buy Stop order at 1.0900. Once the market price reaches that level, the system will automatically trigger a buy order. If the upward momentum continues as anticipated, you’ll have the opportunity to profit from the breakout.

What Is a Sell Stop?

A Sell Stop is used to open a sell order when the price drops to a level below the current market price. This type of order can only be placed at a price lower than the current market level. Once the market moves down and hits the specified level, the order is triggered immediately and may be executed at the set price or lower, depending on market volatility and liquidity at the time.

• Example of a Sell Stop Order

If you expect gold prices to continue falling after breaking below the support level at $3,250 per ounce, placing a Sell Stop order at that level allows you to enter the market as soon as the price drops through support. Once the price hits the specified point, the system will automatically open a sell order. If selling pressure continues, you’ll have the opportunity to profit from the downward price movement.

The four order types—Buy Limit, Sell Limit, Buy Stop, and Sell Stop—are not limited to any specific asset. You can use them across a variety of markets, including stocks, Forex, and gold. It all depends on your analysis and the price trends you anticipate. Understanding how to use these orders correctly allows you to plan your trades with greater precision, manage risk more effectively, and increase your chances of making profitable decisions in any market condition. ³

Why Do Traders Prefer Using Pending Orders?

Traders often rely on Pending Orders because they bring more structure and discipline to their trading. One key advantage is that you don’t need to constantly monitor the screen—orders can be set in advance and automatically triggered when the price reaches your specified level, allowing for precise execution without manual intervention.

Pending Orders also help you follow your trading strategy more consistently, enabling you to plan your entry and exit points clearly. This reduces the risk of emotional decision-making during volatile market conditions. Additionally, by setting Stop Loss and Take Profit levels in advance, you can manage risk more effectively—limiting potential losses while locking in profits according to your goals.

Setting up a Pending Order might seem complicated at first, but it’s actually a powerful tool that helps traders plan ahead with precision, reduce emotional decisions, and manage risk more effectively. Try the Pending Order feature easily on IUX.

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How to Place a Pending Order on the IUX Platform

Placing a Pending Order on the IUX platform is simple and convenient—whether you're using the mobile app or the web platform.

Set a Pending Order on the IUX App Trade

1. Open the IUX application

2. Select the asset you want to trade

3. Tap on "Trade"

4. Choose your order type from the dropdown menu (e.g., Buy Limit, Sell Limit, Buy Stop, etc.)

5. Select your trade size, enter the price level for execution, and set Stop Loss and Take Profit if needed

6. Tap "Place" to confirm your order

Set a Pending Order on IUX Web Trade

1. Go to the IUX Web Trade platform

2. Select the asset you want to trade

3. Choose the order type from the dropdown menu

4. Select the specific order type you want (e.g., Buy Limit, Sell Limit, Buy Stop, etc.)

5. Set your trade size, input the desired execution price, and optionally set Stop Loss and Take Profit levels

6. Click "Place" to confirm your order

How to Place Buy and Sell Orders on IUX Trading Platform for Traders

Tips for Using Pending Orders Effectively

To use Buy and Sell orders effectively with Pending Orders, traders must follow certain principles and maintain trading discipline:

• Use with technical analysis: Define clear entry and exit points based on support and resistance levels, chart patterns, or technical indicators.
• Always set SL/TP: Whether you're placing a Buy Limit or a Sell Stop, you should always set a Stop Loss (SL) to limit potential losses and a Take Profit (TP) to secure your gains.
• Be cautious during news or volatility: Pending Orders can be triggered at unfavorable prices during major news releases or highly volatile market conditions. Extra caution is advised.
• Avoid random order placement: Don’t scatter multiple Pending Orders without a clear reason. Each order should be backed by a well-defined trading plan.

New traders should start using Pending Orders only when they have a clear strategy and understand their trading approach. This method is ideal for those who want to avoid emotional trading and prefer a structured investment style. A good starting point is to practice with Buy Limit and Sell Stop orders to build familiarity before exploring more complex setups.

Note: This article is intended for preliminary educational purposes only and is not intended to provide investment guidance. Investors should conduct further research before making investment decisions.