In Forex trading, there are different types of orders that traders can utilize to be able to manage their trading activities. Although these orders may vary from one broker to another, there are basic order types that all brokers tend to use. Knowing what these orders are will give you a clear and firm understanding of how it works and how it helps with the appropriate entry and exit of trades. Different order types pave the way to different trading styles.
Market Orders
This is probably the first and the most basic that a trader will encounter even in a trading software from IRESS. Just as the name suggests, market orders are being traded at the market. That being said, if you want to join the Forex market as soon as possible, you should trade with the market order that can be entered upon a prevailing price. In most cases, day traders and scalpers rely so much on market orders when it comes to entering and exiting the market swiftly but still following their trading strategy.
Entry Orders
Another common type of order in the market is the Entry Order. This order has unique characteristics in a way that they can be set using the present market prices. If the price trades according to the previously selected price, the criteria to enter and order will be met and the new position will be created automatically. There are a lot of benefits when you use entry orders and among these is not being able to stay in front of the computer for hours just to get the perfect timing to execute a trade. Most of the time, entry orders are used during breakouts or combined with other strategies that prompt execution whenever a price passes through a certain point.
Limit Orders
In Forex trading, there are two types of limit orders – the limit order to open a trade and the limit order to close a trade.
The limit order to open a trade is used to acquire a better entry price. For instance, the EUR/USD is at 1.1294. If you think that it would dip down to 1.1200, you can put your limit order to 1.1200.
The limit order to close a trade, meanwhile, is an order that closes a trade whenever the market goes into an amount that’s according to your favor.
Stop Orders
There are two types of stop orders in Forex trading – the stop order to open a trade and the stop order to close a trade.
The stop order to open the trade is the one that you should use first in the market. These orders are also very helpful during breakouts. On the other hand, stop orders to close a trade are also known as a protective stop order and should be used to close a trade whenever the market goes into a specific amount contrary to your predictions.
Placing a Forex Order
When placing a Forex order, it is important that you are familiar with the platform and that you have reliable trading software from IRESS to support your trades. This will greatly help in minimizing any unnecessary errors when it comes to managing and executing a trade.
