Get to know the types of Forex transactions
Get to know the types of Forex transactions
Getting to know Forex Transaction Types – Have you ever heard of forex transaction terms? Or are you interested in engaging in forex transactions? Forex is a business of buying and selling or trading currencies. In general, in this activity, not all currency pairs can be sold, but only certain currency pairs can be used, such as JPY and USD.
At first glance this business does look easy, just buying and selling, but if you do not learn more about forex transactions, do not expect you can benefit more from this business, because there will be many unexpected things in this business.Even so, if you want to try you can learn about the science of forex trading in many ways. For example books, internet, or study with experts.
Types of Forex Transactions
Well, therefore before going any further about the forex business, it’s good for you to know the types of forex transactions. In general, forex trading consists of two types of transactions, namely “Buy or Buy or Long” and “Sell or Sell, or Short”. Both types of transactions are based on the fact that traders trade. When doing forex business many traders do various strategies in order to get multiple profits.The most effective strategy used to get big profits is to buy at the lowest possible price and sell at the highest possible price. Unfortunately this strategy cannot be used at will, because changes in forex prices can never be predicted easily. So that next, what you need to pay attention to is about time.
When you plan to start trading, pay attention to the right time to start. Choose the right time about when the value of the currency will go down, and when the value of the currency will rise again. Indeed, determining the lowest and highest point in this situation is not easy, so also if you use fundamental analysis and technical analysis, but at least there are businesses that you have tried even with uncertain results.
Every problem must have a solution, as well as in the forex business. To anticipate the exact forex timing problem there are several ways you can learn.This method is certainly related to the types of transactions that exist in forex trading, such as the type of Market Order or Instand Order transactions, and Pending Orders.
Market Order and Pending Order
Market order is a type of transaction that will be carried out based on the broker’s selling price (ask price) and purchase price (Bid Price). Usually a broker will guarantee the execution of this transaction. You can make this transaction if you feel comfortable to queue and want to immediately transact the currency you have. Using market orders, transactions will be faster and no need to wait for a queue.
Unlike market orders, pending orders are transactions where you can determine the transaction at the desired price. Transaction buying and selling can be done based on the transaction conditions that have been set by the trader himself. This transaction is expected to be able to make traders get a better price based on the analysis that has been done. Unfortunately, there is no guarantee that this transaction can be done or not, because it all depends on the price movement for a predetermined time.
Pending orders have 4 types of transactions that you can do.
- Buy Stop
Buy stop means that a trader must buy if the price> price has been set. In this transaction the trader will continue to buy if the price continues to rise and pass certain points that the trader has set.
- Sell Stop
Sell stop means sell if the price <price has been set. In this transaction the trader will sell if the price continues to fall and passes a certain point that can be tolerated by the trader.
- Buy Limit
Buy limit means, buy if the price is <a predetermined price. In this transaction the trader will buy if the previous price rises reverses below a certain price before continuing the increase again.
- Sell Limit
Sell limit means, sell if the price> certain price has been set. In this transaction the trader will sell if the price that was previously dropped is reversed to a certain price before continuing to decline again.
In addition to several transactions above, there are two types of forex transactions that you can choose later, namely Stop Loss and Take Profit.
Stop Loss , a transaction that is carried out where the trader limits the loss he receives by selling his currency if the price has decreased to some extent.Whereas Take Profit is a transaction carried out where the trader attempts to realize the profits he receives by selling the currency if the price falls to a certain time limit, and anticipates that after reaching a certain price the price drops again.