It is not always possible to negotiate immediately and in these cases you need to learn how to trade automatically. Orders can help you get profits or protect you from losses. Trading platforms for the forex market allow entry and execution of different types of orders.
Find out the various types of nuts and how to use them.
Once you’ve chosen the top forex broker that suits better your trading style, it is time to buy or sell currencies, indicating which transactions you want to do.
Instant negotiation is not always possible and the trader has to resort to orders. Order is the way traders enter or exit a transaction. This is the first step to succeed in having a trading strategy that can lead to a profit.
There are different types of order from the basics, recommended for beginners, to the more particular ones and each one is used to give a precise indication to the broker. Less experienced traders find difficult to understand what are the differences between the various types and on many occasions make the wrong choice.
Choosing the right type is the first way we have to avoid falling into unpleasant surprises.
It is an order where the broker opens the position without the trader having to set any parameters.
This order establishes to buy or sell a currencies pair at the current price, that is the price displayed on the video at that time.
However, this type of order cannot be changed or closed before the scheduled time and the price is fixed and unchangeable.
With this kind of order the trader can set the entry criteria as he wish: for example, he can specify to buy a pair of currencies but only if the price falls below a certain threshold.
It’s a way to set up complex forex strategies and it is the kind of order preferred by those who trade in a professional manner.
Unlike the market order, with the entry order it is possible to rethink and remove the order at any time except after it has been executed.
Limit Entry Order Forex
Limit order is used if the trader wants to enter the market by buying or selling a pair of currencies within a certain price limit. It will be the trader to tell the broker at which price he wants to open the position.
The trader must specify the desired purchase / sale limit and the time frame for this order to remain active:
- GFD (Good for the day): the order remains active until the end of the day.
- GTC (Good till canceled): the order remains good until the trader decides to cancel it.
Stop Entry Order Forex
A stop order is similar to a limit, which is to buy or sell currency at a certain price. This order is mainly used to limit losses in the event of adverse market conditions.
If, for example, the market is adversely affected and the trader wants to limit losses, he can use a stop loss order that sets the limit below which he does not want to go. In that moment the broker will have to close all positions automatically.
OCO – Order cancels other
It indicates a particularly complex type of order in which the trader indicates two possible market conditions: for example, sell if the quotation exceeds a certain level and buys if it exceeds another. When a condition occurs, the other is deleted.
It is possible to perform very complex operations with the orders and therefore you need to do a lot of practice before running into unnecessary losses. In the dedicated section you can find the list of all the top forex brokers that allow you to use their demo to practice.