Understanding Different Types of Trading Order. Are you ready to trade? How to order your agent? What is the market order, limit order and stop order? Confusing? The term “order” refers to how to enter or exit a trade. There are few different types of orders can be placed in the external market.
Market order
A market order is an order indicate to the broker to buy or sell at the current market price. For instant, the currency pair is now trading at 1.230 and you want to buy at this price, you can click buy and your trading platform will execute the order instantly at this price.
Limit order
A limit order is an order placed to buy or sell at a certain price and duration. You specify the price at which you wish to buy/sell a certain currency pair and also specify how long you want the order to remain active. For instant, the currency pair is now at 1.200 and you want to buy when the price reaches 1.207. You can set to buy a limit order at 1.207. Your platform will automatically execute a buy order when the price reaches 1.207.
Stop-loss order
A stop-loss order is a limit order linked to an open trade preventing losses if price goes against you. A stop-loss order remains in effect until the position is closed or liquidated. For example, you bought a currency pair at 1.2230. To limit your maximum loss, you set a stop-loss order at 1.2200. In the event the price drops to 1.2200 instead of moving up, your trading platform would automatically execute a sell order at 1.2200 and close out your position.
These are the types for all merchants who normally use. There are other types that are acceptable by some riders of the platform.
GTC (Good till canceled)
A GTC order remains active until you close it. Your broker will not cancel the order for you.
GFD (Good for the day)
A GFD order remains active until the end of your local trading day.
OCO (Order cancels other)
An OCO order is an combination of both limit and/or stop-loss orders. Two orders with price and duration are placed above and below the current price. When one of the orders is executed the other order will canceled automatically. For example. The price of a currency pair is 1.200. You want to buy at 1.210 in anticipation of a resistance breakout or trigger a selling position if the price falls below 1.1900. If 1.210 is reached, you buy order will be triggered and the 1.1900 sell order will be automatically canceled.
Please make sure you know what kind of orders from his agent accepted. Different brokers accept different types of orders.
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