Every forex trader knows about various order types you can use to buy and sell currencies. Each type has its own benefits and drawbacks – that’s why you should know them all before starting trading.
In this article, we will look at the most common order types and explain how they work. So if you’re new to forex trading, or just want a refresher on the different order types this will be useful for you.
Let’s start with the definition of order type in trading.
What is an order type?
In the world of finance, an order is a transaction that you request from a broker using their trading platform. You can place orders to open or close trades when they are specific following what instructions specified by yourself so there’s no confusion about it.
To execute trades, you need a broker who offers trading platforms that allow for orders. Explore axiory review to know the qualities of a trustworthy broker.
Types of Forex orders
Let’s go through some common order types that are accepted by brokers:
The market order is the most basic Forex order type. The main advantage of trading with market orders is that they are straightforward to use.
When you place a market order, you are telling your broker that you want to buy or sell at the best available price. Your order will be matched with another order in the market and you will be filled at that price.
This type of order is divided into 2 parts: limit order to open the trade and to close.
Limit order to open a trade is done to obtain a better entry price. And the second type of limit order is to close a trade when the market moves in your favor by a certain amount.
A stop order is an order that will not be executed until the price reaches a certain stop price. It means that if you want to buy or sell a currency only after the price rises or falls to a certain point, you would use a stop order.
Just like the previous one, the stop order is divided into 2 parts as well: stop entry order and stop loss order.
How to place a Forex order?
The most important nuance is that before placing an order you need to get acquainted with the trading platform you work on. This should be done to minimize the risks that can happen during placing the one.
The steps you will find below are almost the same despite the trading platform you choose.
- Open a daily ticket and select the ‘’order’’ tab
- Decide your trading position (sell or buy)
- Select the amount of a price that will determine the order type
- Place and submit the order
Forex orders are essential to the success of any Forex trader, that’s why you should understand the different types of orders available to you as a trader.
We have outlined the three most common types of Forex orders – market, limit, and stop – so that you can be sure you are using the right one for each trade. See the brokers with high leverage to start the journey. Remember, always use a stop loss order when trading to protect your investment.