Forex market types of order
There are a number of common types of order that are available on the forex market. They include market orders, entry orders, stop loss orders and take profit orders.
Before setting out to trade on the forex market, it is highly advisable to acquaint yourself with the nature of these. They may be suitable for your own forex trading strategy. If not, it may be worthwhile to know the types of orders that other market participants are relying on.
A market order is a buy or sell order in which a forex brokerage firm or financial middleman is ordered to execute at the best current price. In the case of a generally decreasing trend in prices, for example, a market order can be executed to cut your losses. In case of a rising trend, you may come to the conclusion that the trend will not last and cash in your profits before the turn of the tide.
An entry order is an order to buy or sell at a predefined price. Once this price is achieved within the forex market, your currency is bought or sold. This price can be achieved in a week or in a year: future trends are not always predictable.
A stop loss and a take profit order are typically placed to limit losses or gain profits at a predetermined price. It depends primarily on the price you are comfortable with buying or selling at, and also depends on your total funds invested.
