The term ‘order’ indicates that how a trader enters and exit his/her trade. Entry order can also be explained as an order used to enter the market at a stated price. In addition to this it is also important to mention that entry order forex is mainly allocated to 2 different types, and they are:
- Limit Entry orders
- Stop Entry orders
Limit entry orders forex
This is a type of order which is actually used to arrive into the market at a favorable price. It is effective while purchasing a pair where the limit entry order is already placed below the recent market price.
Stop entry orders forex
This type of order mainly operates on the basis of contrary to limit entry orders. These are the type of order which is mainly used to enter the market at the less favorable price.
What are the benefits of using entry orders by the traders in forex trading?
There are mostly 3 major benefits of using entry orders, and they are discussed below.
- First and the foremost benefit is that it helps the trader to save money
- The second benefit is that it helps the traders to save time
- Last but not the least entry order forex is useful for keeping trader accountable
What are the types of forex entry orders?
- A Limit order is a type of order which is used to purchase or sell a pair, given the fact that when certain conditions included in the actual trade instructions are satisfied.
- The most common use of limit order is to create an order which is executed automatically, given the exchange rate touches up to a certain level.
- A market order is accomplished just after the trade is placed. In addition, it is also crucial to note that market order is priced using market price or current spot.
- It is also evident that market order certainly turns as an open position, and it is also subjected to fluctuation in the given market.
- Stop-loss entry order fx is known as a defensive mechanism which helps the trader to protect losses.
- It is also crucial to know that stop-loss orders only restrict loses but they cannot prevent loss.
- For an instance, suppose a trader has chosen US dollar/Japanese Yen pair at 108.57, then it is sure that trader will place a stop-loss at 106.00. Now if the bid price falls up to this level, then the trade will be closed automatically and thus capping the losses.
- Take profit order spontaneously closes an order when the rate of exchange touches the already stated threshold.
- They are also used to lock-in profits in a case when the trader is unavailable to track down his/her open position.
- For example, suppose trader A is long US dollar/Japanese Yen at 108.57 and he wants to earn a profit when the rate touches 109.00. The trader can set this as his/her take-profit threshold. So now if bid price reaches 109.00 then the open position will be closed by the system itself as the profit of the trader will be secured.