Managing the Pending Order
In the previous lesson you learned how to determine the direction that you will trade in and where to place your pending entries and stop losses.
Manage the pending orders while you wait to enter
As the entries and stop loss orders are based on the high and low of the last ten candles, it can be the case that a new candle forms, creating a new high and low within the last ten candles.
Take a look at the image below that shows a pending order for a long trade.
You can see that in the last ten candles, the pending stop order has been placed at the high, shown at 1 and the pending stop loss order has been placed at the low, shown at 2.
You will only enter into the market if the candles go up and hit the pending buy stop order at 1.
Adjust your pending order to the new high and low
In the next image, you can see that a new candle has formed before the pending order executed. This means that there is another set of ten candles that have a new high and low.
You would then need to adjust the pending buy stop order to the new high within the last ten candles, shown at 1, and the pending stop loss order to the new low, shown at 2.
Until the pending order executes, you would continue to adjust your pending entry order and your pending stop loss to the new high and low respectively when a new candle forms.
In short trade, adjust your pending sell stop order
In a short trade, you would adjust your pending sell stop order to the new low and your pending stop loss to the new high.
Take a look at the image below where you see a pending sell stop order, shown at 1 and a pending stop loss order, shown at 2. If a candle touches the pending sell stop order then the order will trigger, entering you into the market.
Adjust your pending order to the new low and high
When a new candle appears before the pending order has a chance to trigger, there can be a new high and low and the pending orders need to be adjusted accordingly.
The image below shows that the pending stop loss order has now been moved to the new high of the last ten candles, shown at 2.
Note that within the new set of candles, the low remains the same and so the pending sell stop order, shown as 1, remains in the same place.
Until the pending order executes, you would continue to adjust your pending entry order and your pending stop loss to the new low and high when a new candle forms.
If the high or the low within the last ten candles remain the same as new candles form, in whichever direction you are trading, then you will not have to change your pending orders.
What next?
After your pending order has been executed, you will need to manage your trade by moving the stop loss.
