when you place a pending order on MT4, what happens to it?

I'm currently looking for a new broker and am considering whether to stay with MT4. Something I read said that 'your order is kept on MT4 server until it is directly executable.' I hadn't realised that if it is the case. Does that mean that my orders only join the queue to be taken once they have been triggered? If you use a different platform is that the same? How do I know if my orders are pending on the trading platform or pending in the banking system?

ta

max

Regardless of the platform or the broker, your orders will NEVER be "pending in the banking system". (unless you trade with millions of capital)
There is no real limit orders in MT4 because there is no order book by default( all orders go in the bucket) and the "broker" manages risk on external software. By default all orders in MT4 are markets orders. The "limits" are just pending market orders.
The only exceptions from this are the brokers who use some custom made bridges, to transmit the orders with STP to the liquidity providers but even they don't offer real limits, only market. (at least I haven't seen any). There are a few retail firms who offer "real" limits, but they are mostly useless.....because they are visible only on the internal book of the broker. (not the whole market)...If you want real limits in FX - trade fx futures.

Thanks mate

So this is why we get slippage on entry but not on exit?

max

It is my understanding that pending orders only reside on the computer on which they are entered. No other computer or server knows they exsist until price goes to the specified point. Then they are transmitted to the broker server and become active live or demo.

All a pending order is saying is "if price goes to specified point I wnat to enter a market order."

Not exactly. The Slippage on the market orders happens mainly for two reasons:
1. Internet latency. It takes time for your order to travel from your PC to the server of the broker and then more time to get executed.(we are talking about milliseconds here) During that time the market price may change several times, so that's why you rarely get the price that you clicked on.This is NORMAL and It happens on all markets.
2 Artificial slippage. Some brokers use special software to control slippage. So they can decide when you get slipped and how much. By default MT4 is equipped with such software called "Virtual Dealer Plugin". There are some custom made much more advanced "virtual dealers" that can manipulate the clients and their orders in many ways.(I can write 5 pages about this.....).
One way to see if the broker plays games with your orders, is to detect the percentage of slippage you get. (% of positive vs % of negative) If you get 100% negative slippage it is clear that they use virtual dealer. However some brokers(and software developers) have become smarter!. Now they use randomization methods. So, some times you get postive, some times negative slippage. And it looks like normal conditions. But if you make accurate statistic you will find something like this:
70% negative slippage
average negative 0.5 pips
average positive 0.2 pips
So on net basis they steal money and its very hard for the trader to notice that.
Some brokers were caught and fined for such practices.(mostly in the US) But they probably still use the virtual dealers. It's extremely profitable practice for them.......

No..... Specifically in MT4 the pending orders(stops and limits) are on the server of the broker. The only exception is the trailing stop, which sits on the user PC. That's why trailing stops don't work when you close the platform.

thanks mate. Much appreciated!
max

Negative slippage appears only in instant market execution and stop order.
Limit order has positive slippage sometime.
If you want to avoid negative slippage, you can use stop limit order however it doesn't exist in Mt4 but mt5, ctraders etc.

Limit order and stop limit orders allow you to have accurate order execution but doesn't guarantee whether it'll get executed because it didn't exactly hit the price.
Stop order allows you to get the order gets executed but it cant guarantee you will get the best price. Stop order is pefectly used when you want to catch a breakout.