It’s very important for you to know how to properly place orders when you go to do the work with a forex broker. The way you’re going to trade, i.e. your entry and exit positions, decides how the orders should be placed. Your entry-exit points can get messed with improper order placement.
Here are some popular and common types of Forex order.
Types of orders:
Market Order – It’s the most common type of order. If you want to make an order in no time at the market price, that is the displayed bid or the asking price on the screen, then you should use market order for the process. Also, you can enter a new position (buy or sell) or exit an existing position (buy or sell) using the market order.
Stop Order – When a stop order reaches a specified price, then it becomes a market order. It’s also used to enter a new position or to exit an existing one. A buy-stop order is used to buy a currency pair at the market price only when it has reached your specified price or more. A sell-stop order is used to sell the currency pair at the market price when that has reached your specified price or lesser.
- You may use stop orders for entering a market while you trade breakouts.
- You may limit your losses using stop orders. A pre-determined stop order, i.e. a stop-loss, can be used effectively to limit your losses.
- You may use stop orders to protect profits as well.
Limit Order – If you want to enter a new position or to exit a current position at a specified price or better, then you should use a limit order. A limit-buy order is used to buy a currency pair at the market price when that has reached your specified price or lesser. A limit-sell order is used to sell the currency pair at the market price when that has reached your specified price or higher.
- You may set your profit objectives via limit orders.
- You can also use limit orders to enter a market while you fade breakouts.
Execute the Right Orders:
A clear knowledge of various types of orders will help you to use the right tools to gain your goals. The Market, stop and limit orders are the most common types of orders. Use them wisely to be in the profit zone. Improper executions can bring you loss as well.