Placing pending orders is one of the most frequently asked questions. Most traders have a hard time to understand what Buy Stop, Sell Stop, Buy Limit and Sell Limit orders are. We already have a detailed article about this topic on this site: Buy Stop and Buy Limit, Sell Stop and Sell Limit Pending Orders on MetaTrader 4
The below article, is indeed the transcript of this video, plus more explanations and screenshots:
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Please watch this video, if you didn’t have a chance to do it before, because I have explained about day trading through the daily candlestick and daily time frame. I explained the system in detail and I also placed a buy pending order and set the stop loss and target, and have shown the different steps to do so. I have given several tips about MT4, setting the buy and sell pending orders, placing their stop loss and target orders, and things like that and monitoring the open positions or pending orders on MT4. These are the things that you need to know because most of you are using MT4.
Setting Buy Stop Orders on EUR/USD
Below is EUR/USD daily chart and the position that you see on it is exactly the same pending order that I set one day before and it was triggered later during the next day. I expected this market to trigger the pending order much much earlier and, but when I woke up the next day morning, I saw that it wasn’t triggered yet. But I didn’t delete the pending order and preferred to wait and see
what will happen. But I think it was during the afternoon that the pending order was triggered and as you can see, it hasn’t triggered the target yet according to what I showed you about MT4 in this video:
If you press Ctrl+T, you will open terminal on MT4. Terminal shows your pending orders, and also the ongoing positions, and also the closed positions. As you can see below, the pending order that was triggered is $330 in profit. It was a one lot size position. I just did it as an example to show you how this system works. Now, I have the option to leave the position and wait for it to trigger the target. I can also move the stop loss to break even or, I can move it a little higher now the stop loss which is the initial settings of the stop loss. It is 84 pips, and also the target is 83 pips that are the sames top loss and target that I talked about them in this video:
As you can see below, July 30th candlestick closed and the new one opened and is forming. To move your stop loss higher when you have a long position, you can easily hover your mouse pointer
on MT4 and click and hold the mouse button, and drag the stop loss higher and drop it wherever that you want:
Then a dialog box asks for confirmation. If I click on the modify button, the stop loss will be moved higher:
If the current market price was so close to the target, I would move the stop loss to break even which is the entry level of the position, or maybe a little higher, but this market hasn’t moved that much and is not close to the target. So I prefer to leave the stop loss there to give the market a little more room to fluctuate and hopefully it will eventually hit the target.
Now the question is what would you do, if you didn’t have any positions right now and you wanted to take a position under the current condition. It means, what is the analysis according to the last
closed daily candlestick, and also all the other candlesticks, uptrend and Bollinger bands that I have on the below chart?
The last closed daily candlestick has a long lower shadow and also a reasonably big bullish body that reflects bullish pressure. It means most probably this market is going to be bullish and the next candlestick is going to be a bullish candlestick as well. As you can see the last closed daily candlestick has almost no upper shadow that means balls have been able to take the control, before the
candlestick close. So there is a buy signal there again. You can do exactly as what I explained in my previous video (this video). You can set a buy pending order few pips above the high price of the last closed daily candlestick, and then set the stop loss and target orders according to the explanations that I gave you in this video. Please don’t forget to watch this video. It’s very important.
Keep in your mind that the market is overbought. Although the last closed candlestick is strongly bullish, it has a long lower shadow and it has a relatively strong bullish body. However, the more the uptrend goes up, the more overbought the market becomes, and it becomes riskier to go long, especially during the next 24 hours. If you want to follow our day trading system, this is the risk that you have to be aware of. A market that has been going up for several candlesticks becomes exhausted, and it’s gonna have a higher chance to form a correction. So, compared to the previously closed candlestick, the position you take based on the current candlestick can have a little higher risk, just because the market is a little more overbought. But, the good thing is that the upper
shadow that July 29th candlestick had cannot be seen in 30th July closed candlestick which means bulls have more control on this market.
As usual, we take a look at the weekly and also the monthly time frame weekly time frame looks great. There is nothing ahead of it it can go up for hundreds of pips. If this market keeps on going up during the last few days of the current week, then the current weekly candlestick is gonna close with a big bullish body and on the monthly time frame, the market has reached the second
resistance line that I have plotted as you can see on the below chart. I have explained about the two lines a lot in my two videos (here and here). You need to refer to those videos to know what these resistance lines are and what should you do with them now that the current forming monthly candlestick has reached the second resistance line. It becomes a little more riskier to take a long position because this market can react to the second resistance line at any time. It is also possible that this market doesn’t pay any attention to the second resistance line and goes up and closes
hundreds of pips above it. That’s what we never know we have to decide based on what we see we have to decide based on what we have before our eyes. So, this market is a little riskier, just because the current price and the monthly time frame has reached the resistance line. Still we don’t know whether these two resistance lines are valid or not:
Click Here to watch the video of this part of my last night’s video that starts from 08:26.
I talked about this currency pair here as well, and I showed you that the last closed daily candlestick had closed above a resistance line on the daily chart, and now the last close daily candlestick which is the today’s candlestick that just closed about half an hour ago went all the way down, retested the broken resistance line, but went up, formed an upper shadow and closed with a strong bullish body. We would have a long position here too, if we had set that a buy stop order with GBP/USD as well, but as I explained here, these currency pairs are strongly correlated to each other.
So, you’d better to take a position with one of them only, not to increase your risk. GBP/USD looked even stronger than the EUR/USD because the red flags that I showed you on EUR/USD different time frames like monthly time frame couldn’t be seen with GBP/USD. For example, on the monthly time frame of GBP/USD (below), there is nothing ahead of the price. The resistance line is hundreds of pips above the current market price, and it seems that there is nothing that can stop the price from going up:
On the weekly chart, a huge and strong bullish engulfing pattern and long trade setup will force this market to go up and this market is going to reach the resistance that you can see below is about 95 pips above the current market price, and then we have to wait and see how it will react to the resistance line. It is strongly possible that this market breaks above this resistance line and closes above it because the signal that it has formed is extremely strong:
If we look at the GBP/USD daily chart, you can see exactly the same signal that I showed you on EUR/USD above. If you are interested in taking a position, you can set a buy stop order few pips above the high price of the last closed daily candlestick which is July 30th candlestick, and then you need to set up your stop loss and target according to what I explained here.
Click Here to watch the video of this part of my last night’s video that starts from 11:14.
I talked about this currency pair in my last article here as well. I explained that it has broken below the support level you can see on the below chart, and it was risky to take a short position because the market was extremely oversold, and it was possible that it goes up to retest the broken support level, which is what it didn’t do by the 30th July candlestick, and it went down as strongly, and as you can see, the currently forming weekly candlestick has already formed a huge bearish body:
However, we still have to wait for the candlestick to close. We should never analyze the candlestick and look at it as a signal, before it becomes matured and closed, it can have several different shapes. For example, this candlestick can go all the way up and close above the support level and form a Doji with a long lower shadow, which has broken out of Bollinger Bands strongly. Then, if the next candlestick closes with a strong bullish body, that’s gonna be a strong buy signal. So, we have to wait for the candlestick to close.
Click Here to watch the video of this part of my last night’s video that starts from 12:28.
Below is AUD/USD monthly time frame. In one of our most recent videos, I have explained about this currency pair as well and the strong long trade setup that it has formed. The market is following this a strong long trade setup which is going up very strongly:
If you check the daily time frame, you can see that the last closed daily candlestick has closed as a Hanging Man. This candlestick is called Hanging Man that has a small body. A typical Hanging Man shouldn’t have an upper shadow, but this one (the 2020.07.30 daily candlestick) just has a small upper shadow and it must have a long lower shadow.
Hanging Man forms at the top of an uptrend. That’s why it is called Hanging Man. If the same candlestick forms at the bottom of a downtrend, then they call it Hammer.
What does hanging man mean?
It means indecision. It somehow reflects the same signal that Doji does. It tells you that bears have been able to take the control and take the price down but then bulls have been able to take the control again and follow the uptrend and close the price a little above the open price of the candlestick. So, if you compare this candlestick with a bullish candlestick that has a huge bullish body, you will come to this conclusion that bulls are becoming a little weak, so that bears have been able to take the control during the day to take the price down. Bulls have been able to have the control the whole day. When such a candlestick forms, it means it is possible that the next candlestick closes with a bearish body and going long (buying) will have a higher risk, compared to the time that you go long after the candlestick that has formed a strong long trade setup on the monthly chart.
If you zoom out, you will see that the market is strongly bullish, and at the same time, we have a very strong long trade setup, so this market is going to be bullish during the next several months, and finally, it will reach resistance level, which is about 950 pips above the current market price. Those who have been lucky enough to take a long position after April 2020 monthly candlestick, now would have been in profit for over 600 pips, but those who want to enter this market based on the daily candlestick, they should know that this market is strongly bullish based on the strong
signal that is formed on the monthly time frame. It can be a little exhausted now and may form some corrections, so it can form sideways for a while, and then goes up. I say this because this uptrend is too sharp and then it becomes a little shallow, and it is now ready to move sideways for a while:
So, going long at this point can be a little riskier, which is what you must keep in your mind. However, you can set a buy stop order above the last closed daily candlestick (the Hammer candlestick that I already talked about). For example, you can set your buy pending order few pips above the high price of the Hammer candlestick, and then you can set your stop loss somewhere close to its low price which is gonna be a 75 pips stop loss, and almost the same target, if you want to take this position based on the daily chart and according to our day trading system that I already explained:
Click Here to watch the video of this part of my last night’s video that starts from 16:38.
If you switch to monthly time frame, you will see that there is an extremely strong long trade setup in this case too (like what we have on AUD/USD monthly chart), and on the daily chart, the last closed daily candlestick has closed with a relatively strong bullish body. There is almost the same condition in this case too. It means there is a long trade setup according to our daily candlestick day trading strategy. For those who want to take a position, they can set a buy stop order several pips above the close price of the last closed daily candlestick which is July 30th candlestick, and then set the set a 85 pips stop loss and almost the same target:
Our Monthly Market Analysis
Click Here to watch the video of this part of my last night’s video that starts from 20:16.
We analyze the monthly time frame when the monthly candlestick closes and the new one opens. Make sure to watch our monthly market analysis carefully because it shows the direction of the markets for long-term, and gives you great opportunities to place pending orders like buy stop order that I explained above.