Types of Orders

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Here we discuss the different types of orders you can place when trading.

You should be aware of Buy and Sell by now.  These are called Market/Instant orders because you Buy or Sell a currency pair at the current market rate.

Let’s say you want to open a trade or close a trade when the currency pair rate reaches a certain value but you are not able to sit in front of you PC and keep watching the market. This is where pending orders come in place. They allow you to open or close trades when they reach a value of your choice.

Limit/Stop Orders:

These are orders where you give instructions for a trade to be opened when a certain price is reached

Stop Orders:

These are orders where you set the WORST price you would want to open a trade.

types of ordersBuy Stop: The value must be set above the current market price so the market needs to rise to reach it.

Sell Stop: The value must be set below the current market price so the market needs to drop to reach it.

As you want to Buy low and Sell high stop values worst would imply setting the stop levels higher for Buy and lower for Sell.

Limit Orders:

These are orders where you set the BEST price you would want to open a trade.

Buy Limit: The value must be set below the current market price.

Sell Limit: The value must be set above the current market price.

As you want to Buy low and Sell high limit values worst would imply setting the limit levels lower for Buy and higher for Sell.

Take Profit/Stop Loss

These two are pending orders where you give an instruction for an open trade to be closed when a certain price is reached.

Take Profit:

Close the trade once the trade reaches a certain level where you have made a number of pips profit. This protects you from your current profits being lost if the market starts moving against you.

Needs to be higher the current market price for an open Buy trade and lower the current market price for an open Sell trade.

Stop Loss:

Close the trade once the trade reaches a certain level where you have lost a number of pips loss. This should be set at the point where you feel that you cannot risk further losses.

Needs to be lower the current market price for an open Buy trade and higher the current market price for an open Sell trade.

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