Types of Orders in MT5 Every Prop Firm Trader Should Know Before Going Live

 

In the competitive world of prop firm trading, success isn’t just about identifying profitable trade setups—it's also about executing trades with precision and control. One of the most essential skills every trader must master before going live with a prop firm is understanding the types of orders in MT5 (MetaTrader 5). The MetaTrader 5 platform provides a wide range of order types that empower traders to manage risk, automate strategies, and react quickly to changing market conditions.

In this article, we’ll explore all the major types of orders in MT5, their relevance in prop firm environments, and how mastering them can give traders an edge during evaluations and live funded account trading.

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Understanding the Importance of Order Types in Prop Firm Trading

Trading in a prop firm environment is different from personal retail trading. Prop firms often impose strict risk management rules, including maximum daily loss, stop-loss requirements, and minimum trade durations. These rules are enforced to protect firm capital and identify disciplined traders. Using the correct order types in MT5 helps traders comply with these rules and avoid disqualification during evaluation phases.

Why Order Type Knowledge Matters in Prop Firms:

• Ensures accurate entry and exit points

• Prevents rule violations like slippage or overexposure

• Supports risk-controlled strategies

• Enables automation in fast-moving markets

Let’s now look at the various types of orders in MT5 and how they apply to prop firm trading environments.

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1. Market Orders: Instant Execution for Fast-Paced Trades

Market orders are the simplest and most commonly used order type in MT5. When a trader places a market order, the platform executes the trade immediately at the current market price.

Relevance in Prop Firms:

Market orders are ideal during high-volatility periods when quick entries are needed. For prop firm traders, using market orders can help capture momentum trades, especially during news releases or breakout strategies.

Best Practices:

• Always combine with a stop-loss and take-profit to comply with prop firm risk rules.

• Avoid overusing in highly illiquid markets to prevent slippage penalties.

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2. Pending Orders: Strategic Entries for Patience and Precision

Pending orders allow traders to set a trade to trigger at a specific price in the future. MT5 offers four main types of pending orders:

a) Buy Limit – Set below the current price, expecting the price to drop and then rise.

b) Sell Limit – Set above the current price, expecting the price to rise and then fall.

c) Buy Stop – Set above the current price, anticipating a breakout upward.

d) Sell Stop – Set below the current price, anticipating a breakout downward.

Relevance in Prop Firms:

Pending orders help prop firm traders remain patient and disciplined—key traits often evaluated during challenges. They are useful for limit-based strategies, which prop firms prefer due to lower slippage and better risk management.

Best Practices:

• Clearly define stop-loss and take-profit before activation.

• Use in swing or range-bound strategies during prop firm evaluations.

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3. Stop-Loss Orders: Essential for Capital Protection

Stop-loss orders automatically close a trade at a predefined loss level. This order type is non-negotiable in prop firm trading, where drawdown rules are strict.

Relevance in Prop Firms:

Most prop firms require every trade to have a stop-loss set. It ensures the trader doesn't exceed the maximum loss limit, which could lead to disqualification or account termination.

Best Practices:

• Never trade without a stop-loss—many prop firms will immediately fail a trader for this.

• Use ATR-based or structure-based stop-loss placement methods for better results.

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4. Take-Profit Orders: Lock in Profits with Discipline

A take-profit order automatically closes a trade once a specific profit level is reached. It helps enforce profit targets and maintain psychological discipline.

Relevance in Prop Firms:

Prop firms value risk-reward discipline. Setting a take-profit allows traders to show consistency and meet evaluation profit targets faster.

Best Practices:

• Use a risk-reward ratio of at least 1:2 to meet prop firm profit thresholds.

• Combine with trailing stops for dynamic exits.

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5. Trailing Stop Orders: Adaptive Risk Management

A trailing stop automatically adjusts the stop-loss level as the market moves in the trader’s favor. This allows a trade to stay open and continue to profit while securing a minimum gain.

Relevance in Prop Firms:

Trailing stops are excellent for maximizing profits while still protecting capital. They help traders stay within drawdown rules while pushing for larger profits.

Best Practices:

• Ideal for trend-following or breakout strategies.

• Set a reasonable trailing distance to avoid early stop-outs.

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6. Stop Limit Orders: Controlled Entry During Volatile Moves

A stop-limit order is a hybrid: it triggers a limit order once a specific price level (the stop) is reached. This provides more control over slippage compared to a standard stop order.

Relevance in Prop Firms:

Traders can use stop-limit orders in volatile conditions to reduce execution risk—critical in fast-moving markets where prop firm risk thresholds can be easily breached.

Best Practices:

• Only use if slippage is a major concern.

• Understand the risk that the trade may not execute if the price gaps beyond the limit.

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How MT5 Enhances Order Management for Prop Firms

MetaTrader 5 is designed with professional-grade order execution tools that are vital for prop firm trading environments. It provides features like:

• Order modification windows for adjusting SL/TP

• One-click trading for faster market orders

• Multi-chart and multi-timeframe analysis for strategic entries

• Trade history reports to review compliance with prop firm rules

Prop firms often integrate MT5 with dashboards that monitor trader behavior in real-time. Having mastery over MT5 order types gives traders a serious advantage during evaluations and beyond.

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Final Thoughts: Prepare Before You Trade Live with a Prop Firm

Success with a prop firm isn't just about strategy—it’s also about execution. Understanding the types of orders in MT5 is a critical foundation for any trader looking to pass an evaluation and thrive in a funded account. From market orders to trailing stops, each order type serves a unique purpose in helping traders manage risk, comply with rules, and execute trades precisely.