Trading Rules & Conditions
Metatrader 5 Order Execution
Types Of Orders
From ALB’s MetaTrader 5 platform clients may place two types of orders to open and manage their trades. Through its trading platform, ALB allows its clients to execute Market Execution and Pending Orders. In addition, the MT5 offers additional pending order types like the Buy Stop Limit and Sell Stop Limit:
Market Execution
This is an order to either buy or sell at the given ‘ask’ or ‘bid’ price respectively at the best available market rate. This order execution results in the opening ( or closing ) of a trade. The system automatically aggregates the volume and best prices received from our third-party liquidity providers and quotes the best available price to trade on. Stop and Limit Orders can be attached to a market execution order.
Pending Order
To limit risk and manage their investment strategies, clients can use several pending orders available on the MT5 platform. The most commonly used are Stop Loss and Limit Orders. All pending orders will remain in the system, unless a condition other than ‘Good till Cancel’ is in place, until executed or cancelled. Different types of pending orders are explained below.
Buy & Sell Limit:
These are orders to buy or sell a financial instrument at a pre-defined rate. A buy limit order requires the pre-defined rate to be lower than the current market rate while a sell limit order requires the pre-defined rate to be higher. As soon as the market hits the limit price, the limit order is treated and executed as a market order at the pre-defined rate.
Buy & Sell Stop Orders:
These are orders to buy or sell a financial instrument at a pre-defined rate. A buy stop order requires the pre-defined rate to be higher than the current market rate while a sell stop order requires the pre-defined rate to be lower. As soon as the market hits the stop price, the stop order is treated and executed as a market order at the pre-defined rate. Unlike limit orders, stop orders allows selling below the current market price or buying above the market price if the stop price is reached or breached.
Stop Loss:
These are stop orders placed to limit the loss. With these orders traders can close a position when the market is moving against the trade at a pre-defined rate. These orders must be linked to an open or pending order and the position will be closed automatically once the market price reaches this level.
Take Profit Order: These are orders placed to book the profits on an open trade. With these orders traders can close a position when the market is moving in their favour at a pre-defined rate. These orders must be linked to an open or pending order and the position will be closed automatically once the market price reaches this level.
Buy Stop Limit:
This type of pending order is a new featured introduced on MT5. This order type combines the stop and limit orders, being a stop order to place a Buy Limit order. When the market reaches the Ask price of the pre-defined stop level in the order ( Price field ), a Buy Limit order is placed at the level specified in the Stop Limit Price field. The stop level must be set above the current Ask price, while the Stop Limit price is set below the stop level.
Sell Stop Limit:
Lie the Guy Stop Limit; this is a new feature introduced on MT5 and not available on the platform. This is a stop order to place a Sell Limit order. When the market reaches the Bid price of the pre-defined stop level in the order ( Price field ), a Sell Limit order is placed at the level specified in the Stop Limit Price field. The stop level must be set below the current Bid price, while the Stop Limit price is set above the stop level.
Good till Cancel (‘GTC’):
This is the default condition used with pending orders to determine when the orders expire. With this option, pending orders are only removed when the trader chooses to manually cancel them. A trader may choose to change the expiry to a specific date.
Modify Pending Order:
Clients may modify or even cancel a pending order at their own discretion.
Bid Prices Displayed On Charts
Charts on the platform are configured to show only Bid prices. Traders should always keep in mind that when opening long positions and closing short positions, the Ask price is used. Clients have the option to enable the feature ‘Show Ask Line’ from the properties menu. With this parameter an additional horizontal line showing the Ask price is visible on the chart for more price clarity.
Trailing Stops
Stop Loss order is intended to help traders limit the loss on their open trades. As a position becomes profitable, traders have the option of move the stop loss to break-even or even trail it as the position goes further and further into positive territory. This could be automated by enabling the Trailing Stop feature. Unlike Stop Loss orders, Trailing Stops operate in the client platform, not in the sever, and will not work if the platform is closed.
Negative Balance Protection
This provider protects retail clients so as to ensure that their maximum losses from trading CFDs, including all related costs are limited to the funds related to trading CFDs that are in the retail client’s CFD trading account. This includes any funds yet to be paid into the account due to net profits from the closure of open CFDs connected to the account. Retail clients shall not incur any additional liability connected with their trading of CFDs.
The aim of negative balance protection is to ensure that retail clients are protected in exceptional circumstances where there is a price change in the underlying that is sufficiently large and sudden, so that this provider is not required to close out the retail client’s position as required by the margin close-out protection, such that the retail client ends up with a negative account value.
This is because large market events may prevent the automatic margin close-out protection from being effective. Where a retail client’s account also includes other financial instruments, only the funds explicitly dedicated to CFD trading and not those dedicated to other financial instruments are at risk.
Expert Advisors ( EAs )
ALB offers you the opportunity to trade your own style and implement your strategies on any instrument we offer. MetaTrader 5 supports Expert Advisors and automated trading systems according to prevailing market conditions and liquidity.
As with Trailing Stops, EAs operate on the client platform and not on the server and therefore won’t work if the platform is off.
Trade Netting
MT5 features Trade Netting. This means all trades in the same financial instrument will be aggregated and displayed as one position. For example, if a trader buys 1 lot EUR/USD, then sells 2 lots EUR/USD, and again buys 3 lots EUR/USD, the position will be automatically displayed as a BUY trade for 2 lots EUR/USD.
Hedging
MT5 allows the hedging accounting system, which allows having multiple positions in the same financial instrument, both in the same and opposite direction.
Swap / Rollover
If a client holds a position overnight (i.e. after closing at 2300 CET), including on weekends and public holidays, the Trading account will be debited or credited to cover the Cost of funding ( Swap ). ALB’s rollover rates are based according to the relevant 1-month LIBOR for all CFD products. Tags: Trading Rules & Conditions
