Types of Forex Trading Orders
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.
Image illustration source: MetaTrader5
For more details about several types of order entry or pending orders, please learn some explanations below.
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.