Market order fx is to purchase or sell a security instantly at their current market worth. This is placed by a fx trader with respect to his or her account, and the order is performed by the trader’s broker. Market fx is the most common and simplest of all orders, the reason being that it is a perfect tool to trade with considering the volatile nature of the market. It does not take long processes before execution and as such does not take a lot of time (during which the price of the security in question might change).
PLACING A MARKET ORDER FOREX TRADE
As a fx trader, your account is not directly linked to the actual market or security market. A fx trader’s account is directly linked to a broker, who takes some things into consideration before actually executing the order. Placing a market order is as simple as clicking a button irrespective of the trading platform, after which the quantity of lots desired is chosen to determine the trade size.
In market order fx, volatility is the order of the day. For instance, a trader can place a market order at a particular market price and the order would be filled and performed at the different price; which may be higher or lower than the request order price. This is usually as a result of the instability of security prices in the market. So, when an order is filled at a price that is different from the request order price, it is regarded as slippage. Slippage can occur at any time and can affect even a market order that is simple and takes lesser time to process compared to other order types.
TYPES OF MARKET ORDER
1. AT MARKET:
This is the default setting of the market order. With this type of market order, your orders would be filled at the best prices. There are no specifications regarding the price of the securities to be sold or bought, the order simply picks the best price at the moment the order is made and then fills it out accordingly. This can yield good results or bad ones because the market is very volatile.
2. MARKET RANGE:
Here a market order is filled with specified price range at which the order can be performed; nothing more, nothing less. This order is carried out with regards to these specifications made by the fx trader unlike “at market” order where orders are carried out based on the best price in the market.