What is an order? Whenever you request to buy or sell a product or service in the market, you are actually placing an order, which is very much the same in the case of the forex market. Also, there are several types of orders that you can make in the forex market. Moreover, here are some of the most important and common types of orders in the forex market, which are vital for you to understand and improve your trading expertise. Do you know about Types of forex orders?
Types Of Forex Orders:
Here are some basic terms to understand
The Market Order:
This is a common order placed by investors and traders to pay a specific currency pair at the current market price. This formula has no rocket science, as the process is really simple.
The Limit Order:
This order enables the selling or buying of any specific currency pair in the market.
The Stop-loss Order:
This is a very common yet often ignored type of stop-loss order. It is similar to the limit order, but it would stop the transactions if the investor or trader has started to experience losses beyond a specific point of deposit. The main purpose of stop-loss orders is to prevent the investor from having any extra losses while trading currencies.
The Limit Entry Order:
It allows traders and investors to buy a currency pair below the market price and sell when the price rises, thereby allowing the trader to gain capital.
OCO (One Cancels Other) Order:
It is important to understand this order because it stops and cancels the other order already placed by the trader.
The GTC (Good Till Cancelled) Order:
This order stays in the market indefinitely until it has been filled or if the trader or investor decides to cancel the order.
There are several types of market orders, but a beginner ought to understand the most common ones. When, how, and why each investor needs to trade in the market depends upon their unique situation. Every type of order has a specific purpose.
Example:
If you are an investor looking for long-term investment, then you would opt for a market order, and if you are a speculator eyeing short-term gains, then the limit entry order is the most appropriate for you. Every order needs to be studied before execution. Experts highly recommend trying various types to learn their effects and identifying the most suitable one for you when trading Challenges. Once you learn about different orders, your decisions will be based on your experience to make better profits in the long run.
You might sometimes set in the wrong order; for example, you might have to use a stop loss order, whereas you used the limit entry order and lost your investment. This should teach you not to repeat such a mistake in your investment decisions.