Types of Orders in Forex

Types of Orders in Forex

There are different types of orders to meet their trading needs. The most basic orders are 3, but there is trading software that has more types of orders. These are the three basics:

Market Order

A market order is the order most basic in forex trading and is used to buy or sell in the market at current prices. If you want to buy just click the buy button of your trading platform and order is executed at the time of the purchase price. If you want to sell just press the button on the sale of its trading platform and order is executed at the time of the sale price.

Limit Order

A limit order is used to buy or sell a currency pair at a predetermined price. An order buy limitis only executed if the value of money or ask price is at or below the limit price. An order limit sell is executed only if the selling price is equal to or above the insert.

A limit order is used to enter trades. You indicate the entry price and the trade is entered automatically when the price reaches the value you set. If you do not arrive at the value nothing happens. This type of order can also be used to exit trades when he was made ​​a profit.You decide how much profit you want and enter the exit price of the trade. Each trade is automatically closed at that price.

To summarize a limit order allows you to decide how much you want to win at the start of trade assuming that the operation goes as you expect.

Stop Order

A stop order is used to buy or sell a pair to a pre-determined price and is connected to a trade aber, is to avoid monetary losses below the desired level. Basically used to exit a trade at a predetermined time for risk management . The stop orders are an essential part of risk management to prevent large losses if the price of money to go against your prediction.

A stop order is to safeguard the capital in case the trade goes against your prediction. You enter a certain amount of loss pre-programmed to limit capital losses. It is always recommended to enter an order of stop loss also called a stop order .

This way you can do trading in a more relaxed because there needs to be always looking at the computer screen.

With a stop order can decide what you are willing to lose if the trade goes against you. Later I will talk more about this subject and I will explain why the inclusion of a stop loss is essential for risk management or risk management.