The most common types of orders are market orders, limit orders, and stop-loss orders.
A market order
A market order is a buy or sell order to be executed immediately at current market prices. As long as there are willing sellers and buyers, market orders are filled. Market orders are therefore used when certainty of execution is a priority over price of execution. A market order is the simplest of the order types.
If you do not give your broker additional instructions, the trade will automatically be entered as a market order.
How it works:
When using a market order, you're almost guaranteed that your order will be executed. When you call your broker and say, Buy 10 shares of ABC stock - the broker will enter the trade as a market order and you will buy ABC at whatever price it is trading at when the order is fulfilled. The downside is that the price you end up paying with your order is fulfilled may not be the price you were quoted before you decided to trade the stock. Trade execution is not instantaneous, and markets can move dramatically in very little time.
When to use pending orders?
If you are buying:
Pending orders for a buy can be put as buy limit or buy order.
(1) Buy limit
If you want to buy at price below the current price use this tool.
E.g.: If you are trading a breakout strategy and waiting for retracement confirmation, you can put a buy limit near the support or resistance zone where retracement is likely to happen. So when the price which is currently higher due to breakout comes down for retracement, your buy order will get executed.
(2) Buy stop:
When you need to buy at a price above the current price, put a buy stop order.
If you are selling:
(3) Sell limit
This can be used if you need to sell the currency pair when price is above current price level.
(4) Sell stop
If you want to short at a price below the current price use sell stop.
E.g.: if you find a major resistance level above the current price and wish to short if price reaches that level, then this tool can be used.
Benefits of pending orders
Choose the price: Pending orders help you to choose the price at which you want to trade
Trade without your presence: Pending orders are greatly helpful for those who cannot spend their time in front of computer to execute trades.
You can set your stop loss and take profit levels in the pending order itself.
You can set the expiry time for order. So if the price did not reach the price level you mentioned within that time the pending order get automatically deleted.
Reduces impulsive trading to an extend: In my opinion pending orders help to reduce impulsive trading