Types of Forex Trading Orders

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Types of Forex Trading Orders

Types of forex trading orders, If we run a forex trading business or a foreign exchange trading business then we will know the name of the Market Order, Entry Order and Stop / Limit Order. Because of these types of orders, the forex trading business makes business very easy to do when viewed from a technical standpoint compared to other types of businesses. Each order can be used by forex traders to get trading positions in accordance with their plans so that forex traders can easily enter and exit the market whether you are a scalping trader, day trader or swing trader.
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Market Order and Pending Order

Market Order

If you use the MetaTrader4 or MetaTrader5 trading platform then you will find the term Instant Executin in the Order window as shown above. So actually the name Instant Execution is the same as the market order, which is an order made at the price on the forex market at the time of execution. So suppose that the price of the GBPUSD currency on the market at that time was 1.30155 / 1.30174 and if you order the type of Instant Execution or Market Order then you will get the currency price (Buy-Sell) directly. So if you click the Sell button, the price of the currency you get is 1.30155 and if you click the Buy button, the price of the currency you get is 1.30174.

Market order is perfect for scalper type forex traders, namely forex traders who run forex trading business with very short time frames in units of time seconds because this type of forex trader is a type of forex trader who wants a little profit (10 to 15 pips ) for every forex trading position. Even so the forex trader who runs forex trading with a long time frame is also very suitable to use this type of order.

Entry Order

The next type of forex trading order is an Entry Order , which is an order for which you have specified the Sell-Buy price based on certain conditions. By running this type of forex trading order like this then you can get prices far from the market price right away. So, if the Sell-Buy price set or desired has been reached then the trading position will open. If you use the MetaTrader4 or MetaTrader 5 trading platform, the term entry order is the same as pending order. And if you do a forex trading order in this way then you actually have an advantage that the Sell-Buy price obtained in accordance with the plans that have been made and of course to plan this kind of thing requires a deeper analysis. In addition we also do not need to have to be continuously in front of a computer screen to monitor currency price movements.

Entry Order / Pending Order

 

You can use this order when running a forex trading business with a Buy open position strategy if the price has been broken or sold if the price has broken down or can also run other strategies such as when a price has passed then you open a Buy position at a certain price point. And the Entry Order itself has several types which include Buy Limit, Sell Limit, Buy Stop, Sell Stop, Buy Stop Limit, and Sell Stop Limit.

Entry Order / Pending Order

Image illustration source: MetaTrader5

For more details about several types of order entry or pending orders, please learn some explanations below.

Buy Limit and Sell Limit

It is a type of forex trading order that is commonly used to anticipate price movements which if it turns out the price moves in reverse direction. Let’s say you as a forex trader have predicted that the price of a currency will move up but will first move down so to anticipate this you open a Buy Limit position that is buying the currency at a lower price. And if the price touches the Buy Limit price point then your order will be executed and as long as the Buy Limit price point has not been touched then your order is pending.
If you are still confused about Buy Limit orders, then please pay attention to the following forex trading illustrations. The price of GBPUSD currency in the forex market is 1.30174 but you are sure that the price will move up after touching the price of 1.30012 first then for an illustration of the price movement you can install a Buy Limit order at the price of 1.30012 (lower price). And as long as the GBPUSD price does not touch the 1.30012 price, Buy Limit orders will never be executed or are pending.And you can also open a Sell Limit order if you believe that the price of the currency in the market will move down after moving up first. And if the currency price touches the price point of your order, the trading position that you opened will be executed and as long as your price point is not touched, your order will never be executed or pending.

Let us all understand about Sell Limit orders so we can see the following forex trading illustrations.The price of GBPUSD currency in the forex market is 1.30155 and you are sure that the price will drop after the GBPUSD currency price reaches 1.30202 so you open the Sell Limit forex trading position at the price of 1.30202 (higher price). And as long as the GBPUSD price does not touch the 1.30202 price then your Sell Limit order will never be executed or pending.

Actually, without opening a Buy Limit or Sell Limit forex trading position, we can get the price we want, namely by doing a market order, but we must continuously monitor the price movements through the computer. But to do this you can get tired right. And so you don’t get tired / emotional and can do other activities so you can use this type of order entry facility or pending order.

Buy Stop and Sell Stop

Is a type of forex trading order that is used to anticipate the currency price to continue its movement. For example, you have a prediction that the price of the currency will continue its movement after penetrating a certain price then you can install a forex trading order Buy Stop or Sell Stop. If the price will continue its upward movement ( bullish ) then you can install a Buy Stop forex trading order and if it turns out it will continue the downward movement ( bearish ).

If you are still confused then let’s continue the explanation in detail through an illustrative example of when is the right time to open a forex trading order. For example, the GBPUSD currency price in the forex market is 1.30037 and you are sure that the price will continue to move up after breaking the 1.30045 price (higher price) then you can open a Buy Stop forex trading order at the price point of 1.30045. If the GBPUSD currency movement touches the price point then the open position will be executed but if it turns out your prediction is wrong and the price point is not touched then the forex trading position that you opened was still in pending order condition.

On the contrary, if the GBPUSD currency price on the forex market is 1.30023 and you are sure that the price will continue to move down after breaking the 1.30001 price (lower price) then you can open a Forex Sell Stop trading order at the price point of 1.30001. And if your prediction is correct that the GBPUSD currency movement touches or passes the price point then the Sell Stop trading position opening will be executed but if it turns out your prediction is wrong and it turns out that GBPUSD price movement does not touch the price point then the Sell Stop trading position you will never executed or still in pending order condition.

We can use the types of Limit and Stop orders in forex trading to protect the capital that we have when running a forex trading business or we usually call it the term risk management . And we need to say again that technically this type of forex trading order is a type of Entry Order or Pending Order. You can use a stop order to anticipate if it turns out the price will continue to move and limit orders to anticipate if it turns out the price will reverse direction.

If you are curious and want to learn how to use these types of forex trading orders above, please just register with a forex broker and of course please use a DEMO (FREE) account first to study before using a REAL account to book profits (profit).
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