There are many types of orders in forex market. But as a trader you should keep in mind that all forex orders types are not available to all online brokers. Therefore, when you set out to trade, ask your prospective forex broker about these different orders in forex.
But before we go into the subject of the different kinds of orders in forex, let us try to understand what these orders are. Orders are important trading tools in the forex trading currency market. Look upon them as trades waiting to happen. When you place a forex order, you’re in the market with a following price action activating its execution. Therefore be very careful when placing different orders in forex market.
Types of orders in forex trading:
Take profit orders
All traders just fall in love with the name of this forex order. Use these types of orders in forex trading to lock in profits when you have an open position in the market.
A limit order is a type of order in forex that sets off a trade at more desirable levels than the present market price. Always think of “buying low and selling high”. When buying these kinds of orders in forex, they must be entered at a price below the present market price. Similarly, if you have to sell the limit order, it must be placed at a higher price than the current market price.
Stop loss orders
Don’t get bogged down by the name. These types of orders in forex trading are critical to trading survival. As per the name, the stop-loss order stops losses by closing an open position that is losing money. The traders use these forex orders to minimize their losses in forex trading currency market.
Trailing stop loss orders
One of the keys to profitable trading is to act fast and cut your losing positions, while letting the winning positions run. A trailing stop-loss forex order helps you to do just that. These kinds of orders in forex are set at a fixed number of pips from your entry rate and adjust the order rate as the market price moves.
Commonly referred to as an OCO order in forex trading currency market, a one-cancels-the-other order is a stop-loss order corresponding to a take-profit order. This type of order in forex is like the ultimate insurance policy for any open position.
Another types of orders in forex are the contingent orders. They are a combination of several types of forex orders to develop a complete trading strategy. The contingent orders have all the bases covered with your risks defined. These kinds of orders in forex are also referred to as if/then orders.
Forex traders use different orders in forex to catch market movements, especially when they’re not sitting in front of their computers. Although there can be no guarantee that using forex orders will limit your losses or protect your profits, as the forex markets can be notoriously volatile, a disciplined use of forex orders can help you to capitalize on market movements and quantify the risk you’re taking.