How To Order In Forex Market

Similar to the notion of "order" in restaurants; In Forex trading, this word hints at how we want to "order" open-position or close-position, or want a message for now or later. Whether to buy / sell at what price, how the trading position will be closed, and so on.

1. Market Order
It's the simplest type of order. Market order is a type of buy / sell order at the best available price in the market. For example, the bid price on EUR / USD is currently at 1.2140, and the ask price at 1.2142. If we want to buy EUR / USD at market price, then it will be "sold" on us with the price 1.2142. We will click "buy" on the trading platform, and the platform will immediately execute a buy order at that price. Simple is not it? It's like buying things in an online shop, it's just that we buy not new clothes.

2. Limit Entry Order
"Limit entry order" is a type of order placed to buy below current market price, or sell above current market price.

For example, EUR / USD is currently trading at 1.2050. We want to open short position if the price reaches 1.2070. We can wait until when the price reaches 1.2070 then click sell with market order. But we can also install "sell" with limit of entry order now, then left behind. If the price rises up to 1.2070 then the trading platform will automatically open the sell position at the best price at that time.

Traders can take advantage of this type of order, if they believe that the price will reverse after reaching a certain level, or in terms of cool, reversal.

3. Stop-Entry Order
"Stop entry order" can be used if we want to open a buy position above the current market price, or sell below the current market price. This is used if we estimate the price will continue to move in the same direction.

For example, GBP / USD is currently trading at 1.5050 and appears to be moving upwards. We think that the price will continue to rise if it has touched 1.5060. Next, we can wait until the price reaches 1.5060 then just click "buy" with market order, or now we put stop-entry order at 1.5060.

4. Stop-Loss Order
"Stop-loss orders" are used to prevent losses from getting worse, if prices move in an unexpected direction. This type of order is installed after we open a "buy" or "sell" order with any type of order, and will continue to apply until the stop-loss order is revoked or our trading position is closed.

For example, we open long positions EUR / USD at 1.2230. To limit the maximum loss, then we install stop-loss at 1.2200. That is, if we are wrong predictions and EUR / USD fell to 1.2200, then the trading platform will automatically close the trading position immediately with our loss 30 pips.

It sounds ugly, but it could be better, than if the price turns up to 1.2100 and we do not plug the stop-loss at all and then turn the loss 130 pips! Stop-loss is very useful if we do not want to sit in front of the monitor all day after opening the position.

5. Trailing Stop
A trailing stop is a stop-loss order placed at a trading position, but may be subject to fluctuations in price.

Let's say there is a USD / JPY short position at 90.80, with a trailing stop of 20 pips. This means, the initial stop-loss is at 91.00. If the price turns downwards as expected, then touched 90.60, then the trailing stop will automatically move forward 20 pips to 90.80 (also called break event).