Types of Orders In Forex

Similar to the notion of "order" in restaurants; In Forex trading, this word hints at how we want to "order" open-position or close-position, or want a message for now or later. Whether to buy / sell at what price, how the trading position will be closed, and so on.

1. Market Order
This is the simplest type of order. Market order is a type of buy / sell order at the best available price in the market. For example, the bid price on EUR / USD is currently at 1.2140, and the ask price at 1.2142. If we want to buy EUR / USD at market price, then it will be "sold" on us with the price 1.2142. We will click "buy" on the trading platform, and the platform will immediately execute the buy order at that price. Simple is not it? It's like buying things in an online shop, it's just that we buy not new clothes.



2. Limit Entry Order
"Limit entry order" is a type of order placed to buy below current market price, or sell above current market price.

For example, EUR / USD is currently trading at 1.2050. We want to open short position if the price reaches 1.2070. We can wait until sometime the price reaches 1.2070 then click sell with market order. But we can also install "sell" with limit of entry order now, then left behind. If the price rises up to 1.2070 then the trading platform will automatically open the sell position at the best price at that time.

Traders can take advantage of this type of order, if they believe that the price will reverse after reaching a certain level, or in terms of cool, reversal.

3. Stop-Entry Order
"Stop entry order" can be used if we want to open a buy position above the current market price, or sell below the current market price. This is used if we estimate the price will continue to move in the same direction.

For example, GBP / USD is currently trading at 1.5050 and seems to move upwards. We think that the price will continue to rise if it has touched 1.5060. Furthermore, we can wait until the price reaches 1.5060 then just click "buy" with market order, or now we also put stop-entry order at 1.5060.

4. Stop-Loss Order
"Stop-loss orders" are used to prevent losses from getting worse, if prices move in an unexpected direction. This type of order is installed after we open a "buy" or "sell" order with any type of order, and will continue to apply until the stop-loss order is revoked or our trading position is closed.

For example, we open long positions EUR / USD at 1.2230. To limit the maximum loss, then we install stop-loss at 1.2200. That is, if we are wrong predictions and EUR / USD fell to 1.2200, then the trading platform will automatically close the trading position at that time also with our loss 30 pips.

It sounds ugly, but it could be better, than if the price turns up to 1.2100 and we do not plug any stop-loss at all and then it turns out 130 pips loss! Stop-loss is very useful if we do not want to sit in front of the monitor all day after opening the position.

5. Trailing Stop
The trailing stop is a stop-loss order variant placed in a trading position, but can be scored along with price fluctuations.

Let's say there is a USD / JPY short position at 90.80, with a trailing stop of 20 pips. This means, the initial stop-loss is at 91.00. If the price turns downwards as expected, then touches 90.60, then the trailing stop will automatically move forward 20 pips to 90.80 (also called break event).

Once the trailing stop moves, it will stay at that level. So, suppose the price then turns down again until it touches 90.80, then the position will be directly closed there.

6. Unusual Types of Orders
The five orders above was the type of order in forex commonly used by traders. But if a trader is more experienced and have greater capital, then it could be using some other types that are not commonly used. Among them:
Good 'Till Cancelled (GTC): Order GTC will remain active in the market until we decide to cancel it. The broker will not cancel the order unilaterally. Therefore, we must be careful and remember if we have scheduled this order in trading.
Good for the Day (GFD): The GFD order will be active in the market until the trading day is over. But because the forex market lasts 24 hours, then it's good to check to the broker to know the exact date of trading day terminated.
One-Cancels-the-Other (OCO): The OCO order can be said to be a combination of two orders plus stop-loss. Two orders with different price and duration are placed above and below current prices. When one of the orders is executed, the other one is canceled.
For example, the current EUR / USD price is 1.2040. We want to buy at 1.2095, or sell if later the price falls to 1.1985. Well, after the OCO is installed, the price rose and reached 1.2095. S