What are Orders in Forex? And what are its types?
What are Orders in Forex? And what are its types?
Orders in Forex are the instructions sent to a broker to open or close a trade. Orders not only help the traders by making their trading easy it also plays a vital role in the risk management of the investment. Orders can help the trade enter the market as well as protect their investments and lower the risk margins.
Types of Orders?
There are many types of orders in forex and understanding the difference between them can help the trader determine and choose the best that suits them according to their trading goals.
Stop Orders: Stop orders are the orders that are triggered the when market hits a predefined rate. There are two types of Stop Orders, Stop Orders to Open a Trade and Stop Orders to close a Trade.
Stop Orders to Open a Trade: The Stop orders work on a prediction basis. Suppose if the Current Exchange rate of EURUSD is 1.555 and you thought it will rally further to 1.56, you can put open a trade order and your trade will automatically start once the market hits 1.56.
Stop Orders to Close trade: The Stop order to close trade aka Stop Loss order and Take Profit Orders. Stop orders to close trade is applies when the trader wants the trade to shut when a certain point is reached. This can be applied for both, Profit and Loss.
Market Orders: A market order that a trader gives to his/ her broker to enter and exit the market at the next best price. A market order is generally used when the trader wants in or out of a trade quickly and is not concerned about the price.
Limit Order: The limit order is the order that a trader gives to his/ her broker to execute the trade at a specific time and price. It can be used while trading in currencies for a lower price than the market and then selling them off at higher prices.
Like Stop orders, there are also two types of Limit orders, Limit orders to open trade and limit orders to close a trade. Overall, the purpose of this type of order is to reduce the risk of a sudden price fluctuation, that can lead to uncontrollable losses best Forex Trading company. Make sure you’re using the proper investment strategy and the market conditions are ideal when you place this order with your broker. No matter how much one prepares, and how smart the strategy is– the forex market is highly dynamic and can turn against you at any moment. But choosing the right broker can take a lot of loads off you as not every broker gives you the freedom to apply for all these orders. Capitalsands.com is a licensed forex broker that knows the importance of these orders and not only allows you to apply for these orders but also gives you free Signals to ensure that you trade at your best. Read More.
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