Exploring the Different Types of Orders in the Forex Market
Before you enter the Forex market, you have to know about the different types of orders in Forex. In Forex, order means the way how you will choose to enter or exit the Forex market. There are different types of orders which exist in Forex and different brokers accept different orders.
Now, we will give you a brief idea about the different types of orders used in the retail trading industry. If you want to become a full-time trader, you must have a strong idea about these, or else you will not be able to execute high-quality trades in the market.
Market Order
It is the simplest type of order in Forex. It is also the most profitable type of order. It is the order which means; you can buy or sell your currency at the best available price. This order lets you make money in Forex at your best available price.
Stop-Entry Order
Stop–Entry order is that type of order when you set a limit for your trade to close automatically and make money. It is an automatic decision about an order. For example, you are trading GBP/USD at 1.2320 and you believe it will reach 1.2330. You can make a Stop-Entry order. That is, the trade will automatically close when the trade reaches 1.2330 and make you profit.
Stop-Loss Order
This is the opposite of the Stop-Entry order. You set it to limit your loss. In the example that we have given, you can set a Stop-Loss order at 1.2310 if you think the trade will go down. If the trade goes down to 1.2300, your trade will automatically stop at your set Stop-Loss price of 1.2310 and keep your account from running out of money!
Limit Entry Order
This type of order is a combination of the Stop-Entry order and Stop-Loss order. If you believe the market will hit at a point, you can use the Limit Entry order to buy below the market or sell above the market. When the market reaches that point, your trade will automatically close.
Those who are trading government bonds for a long time, often use the limit entry order as it helps them to reduce the hassle in trading. While using such an order, make sure you keep the risk factor low since you can never predict the outcome from a given trade.
Trailing Stop
This type of order is similar in pattern to the Stop-Loss order. These orders are placed to make a minimum loss. The unique feature of this order is that, if you set the limit to 20, as long as the market moves, it will always go up keeping a distance of 20 and making your profit as large as it can be. But if the market trading is going down, it will remain constant to your set position and stop at the point you set to minimize the risk.
Some other types of order
Apart from these popular and most used orders, there are some other types of orders.
Good for the Day (GFD)
The order is active until the market closes
One-Triggers-the-Other
This is a mixture of two Stop-Loss orders. If one of the orders is activated, the other trade is also triggered.
One-Cancels-the-Other
Like the one-triggers-the-other order, this order is also a mixture of two Stop-Loss orders. If you place two orders, when one order is triggered, the other order gets cancelled. It is the opposite of one triggering the other order.
Good ‘Till Cancelled
This type of order is active until you close the order. It is an order that is in your hands, and that you can choose to cancel.
Summary
These are the most popular types of orders in Forex. Some of the other orders are used, but the popular orders are mostly commonly used in Forex trading. With the right choice of order, you can make money in the Forex market.
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