SMTP Authentication problem

[nandar]

Hi,

I configured "SMTP authorization is required" under Plesk >Server >Mail. But, in outlook, I can send emails without checking "My outgoing mail server requires authentication". As far as I know, if I turn on "SMTP authentication" in plesk, I need to set up "my mail server requires authentication" in outlook. Otherwise, I should not be able to send emails. Can anyone explain me what do I miss here?

Also, from outlook, I can send emails from non-existence email address to local addresses.
for example,
sender : dddddd@mydomian.com (non-existence email)
receiver : myemailaddress@mydomain.com

So, it means anybody who knows my SMTP server can send spam emails to all the email addresses in my server.

Can anybody help me out to solve this problem? Thanks.