Different Types of Orders

In trading, the forex market offers different kinds of orders. Certain major types of these orders are the following:

Market orders – Also known as at the market, the forex firm is to place the order at the best available current price whether to choose to buy or sell order.

Entry orders – client asks a request from a forex firm, whether to buy or sell a particular amount as well as a particular currency pair at a specific price. Completion of the order will take turn after the requested price is attained.

Stop Loss Orders – As an order reaches a specified price, the position is automatically closed. The main function of this, is to limit the loss of a trader on a determined position. If the position made is open on a buying currency pair, the stop loss order will signal for request in changing the position to sell when the price fall to the specified level and vice versa. Using stop loss is highly recommended to limit traders’ losses. Investors could experience a situation in which they’re unable to monitor their trades for an extended period, that’s why stop loss orders are very important.

Take Profit Orders – when a positioned order reaches a predetermined profit, the order placed exits the price. It is made to lock in a position’s profit. The take profit order becomes a market order and automatically closes the position as the price exceeds the predefined profit-taking price.

Good Until Cancelled (GTC)- GTC means that an order will only be valid until it is cancelled, notwithstanding the trading session where most of the orders made are GTC in forex trading. The traders signals when they wish a GTC order to be cancelled earlier before the expiry. Basically, the entry orders, stop loss orders and take profit orders are all GTC orders in forex trading.

The given information above are the existing basic order types in most of the trading systems. However, certain trading systems could deal with greater orders. Traders should be aware of the different order methods and use them when trading.

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