FOREX: TYPES OF ORDERS
forex, fx, currency
The term of “order” refers to the way in as it will start or end an operation in Forex. In this section we discuss the different types of orders that can be placed in the foreign exchange market.
Make sure you know the different types of orders on Forex that accepts your broker or broker. This may vary depending on the broker.
Types of orders
There are several types of orders on forex basic offering all the runners.
Market order (Market order). A market order is an order to buy or sell at the current market price.
For example, suppose that EUR/USD is 1.2140. If you want to buy this exact price, would be click buy on the respective platform, which instantly executed an order of purchase at that price. That’s basically a market order, purchase a currency at the time.
Order limit (Limit order). A limit order is an order placed to buy or sell at a specific price. The order contains two variables; price and duration.
For example, suppose that EUR/USD is trading at 1.2050. You want to go long, i.e. buy the currency, if the price reaches 1.2070. You can sit in front of the monitor and see the price each time until you reach 1.2070 to run a market order or, you can simply place an order limit to 1.2070. In the latter case, it will not be necessary to keep across the monitor, as the platform is responsible is execute your order at the time at which price you arrive at 1.2070. You can specify to price you want to sell or buy and also can specify as time the order will remain active (GTC or GFD).
Stop-Loss (order to stop losses). A stop-loss is an order limit, but related to a currently open operation. Its purpose is to prevent additional losses if the price moves against one. Or, they also serve to protect a certain level of profits obtained by an operation that is gaining.
Suppose, for example, that you bought the EUR/USD from 1.2230. To limit possible losses, is placed a stop-loss to 1.2200. This means that if the price returns and reaches the price of 1.2200 rather than up, the platform automatically execute an order at the price of 1.2200, and position would be closed for a loss of 30 pips. The stop-losses are extremely useful if one does not want to sitting in front of the monitor all day worried about losing all their money. You can simply place a stop-loss in any open position to be protected in the event of an eventuality.