Types of Forex Orders

Trading the forex market will involve buying of one currency and the simultaneous sale of another currency. The process involves placing orders using the trading platform, and the type of order placed will depend on the market conditions that favour the trade. Sometimes, the conditions for a good trade may not exist as at the time the trader is analyzing the market, but the trade may setup nicely at a future time or date.

These factors ultimately make it imperative that a trader is conversant with the various types of trade orders used in the forex market. The order types are divided as shown below:

a)      Instant orders

b)      Pending orders

Under the instant orders, we have the BUY and SELL orders, also referred to as MARKET BUY or MARKET SELL orders. They are called market or instant orders because the trader places the orders at market value/price.

There are four types of pending orders:

–          Buy Limit

–          Sell Limit

–          Buy Stop

–          Sell Stop

The Limit and Stop orders are used as pending orders because they are setup to take advantage of future favourable setups not existent at the present time. Limit orders are used when the trader expects the currency pair to continue in the present trend and reverse at a key price barrier. Stop orders are used when the trader expects the currency pair in view to continue in the present trend, usually moving past a key price barrier. Limit and Stop orders can be performed on the buy and sell side.

So understand the various trade orders and know when to use them to get as profitable as you can in the forex market.




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