Basic Concepts VI: Types of Orders

The forex market provides different kinds of orders for trading. The following are some major types of orders that can be found on forex trading stations.

Market orders - A buy or sell order in which the forex firm is to execute the order at the best available current price. It is also called at the market.

Entry orders - A request from a client to a forex firm to buy or sell a specified amount of a particular currency pair at a specific price. The order will be filled once the requested price is hit.

Stop Loss orders - An order placed to close a position when it reaches a specified price. It is designed to limit a trader's loss on a position. If the position is opened with buying a currency pair, the stop loss order would be a request to sell the position when the price fall to the specified level. And vice versa. Traders are strongly recommended to use stop loss orders to limit their losses. It is also important to use stop loss orders when investors may enter a situation where they are unable to monitor their portfolio for an extended period.

Take Profit Orders - An order placed to close a position when it reaches a predetermined profit exit price. It is designed to lock in a position's profit. Once the price surpasses the predefined profit-taking price, the take profit order becomes market order and closes the position.

Good Until Cancelled (GTC) - In online forex trading, most of the orders are GTC, meaning an order will be valid until it is cancelled, regardless of the trading session. The trader must specify that they wish a GTC order to be cancelled before it expires. Generally, the entry orders, stop loss orders and take profit orders in online forex trading are all GTC orders.

The above are the basic orders types available in most of them trading systems. Some trading systems may offer more sophisticated orders. Traders should be familiar with the different orders and make the most of them during trading.

Updated Version of "Basic Concepts VI: Types of Orders"

Hey there! Just giving you a heads-up, this is an updated version of the "Basic Concepts VI: Types of Orders" article. This is based on what I've learned so far, so let's dive into the different types of orders you'll encounter in the Forex market. Understanding these is super important for making smart trading moves and keeping your risks in check.

Market Orders

Market orders are all about immediate action. They execute right away at whatever the current market price is.

Use a market order when you want to get in or out of a trade fast and are okay with the current market price.

Entry Orders

Entry orders are your way of saying, "I want to buy or sell at this specific price." These orders kick into action only when the market hits the price you've set.

They're great for getting into a trade at a price you've already decided on.

Stop Loss Orders

Stop-loss orders are your safety net. They automatically close your position if things start to go south and hit a loss level you've set.

They're crucial for managing your risk and making sure you don't lose more than you can handle.

Take Profit Orders

Take-profit orders do the opposite of stop-loss orders. They close your position when it hits a certain profit level.

They're perfect for locking in profits without having to watch the market every second.

Good Until Cancelled (GTC)

GTC orders stick around until you say "enough." They don't expire at the end of the trading day and keep going over multiple sessions.

Ideal for long-term strategies or when you can't keep an eye on the market all the time.

More Sophisticated Orders

There are also some fancier order types you might come across, like:

Trailing Stop: This is a moving stop loss that adjusts as the market goes your way, helping to lock in profits and reduce losses.
OCO (One Cancels the Other): This is a two-for-one deal. When you cancel one order in the pair, the other gets canceled too.
Limit Orders: These are about getting the price you want or something even better.
Market If Touched: These orders turn into market orders if a certain price is hit, ensuring you get in on the action right away.

Getting the hang of these different order types is key to really getting good at Forex trading and hitting your trading goals.

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