Traders have to keep the focus on market trend to place a valid order. It is extremely crucial that one should place an order at an appropriate price that will support your desire. This helps in proper entry or exit from the trading position. Order Forex without proper execution might skew the entry and exit points that will lead to incurring some losses. In this prospect, you should know the types of orders and when to utilize them.
Types of Order Forex:
Some of the order types are most common, and some of them sound different but are in use. They include:
GFD (Good For the Day)
GTC (Good Till Cancelled)
OCO (One Cancels the Other)
One Triggers the Other
A market order is the common type of order that is followed by every trader. This means whenever trader executes or initiates a position at the market price, he/she sets its market order. In fact, every new entry can be termed as a market order that sets the basics of order during entry.
Stop-entry order is set at the value that is above the market price for buying, and it will be below the market price while selling.
For example, if a trader sets buying at 1.2050 and offers stop-entry order at 1.2070, then the order will be executed automatically when it hits the value 1.2070.
Limit-entry order is set to enter at the lower price of the market value to buy and at the higher price of market value to sell.
For example, when a trader buys at 1.2050 for a currency pair and offers limit entry order at 1.2070, then it will be reversed automatically at 1.2070.
It is the order Forex that is used to avoid losses. A trader should know that stop-loss value will remain activated until it is liquidated. You can even cancel it manually.
For example, suppose a trader has set long position at 1.2050. To limit the amount of loss, the trader should set a stop-loss that might be $1.2020. This suggests that market trend has been changed due to certain reasons, and it reverses the direction to reach lower value. In this concern, when the value reaches $1.2020, it will automatically execute stop-loss to exit and protect traders from further losses.
It is a type of stop-loss order. Trailing stop-loss moves as the price of the market fluctuates for the particular security.
For example, suppose you have set your trailing stop-loss at 90.50 for a short position that is set to 90.30. If the market goes down to hit 90.10, then this trailing stop-loss will automatically set itself to 90.30.
GFD (Good for the Day)
This order is usually set to make a trade where GFD value remains activated until the end of day trading. One has to check the GFD order next day whenever you make a trade to change its value as per the market trend.