Types Of Foreign Exchange Orders
There are various types of foreign exchange orders which are used in currency trading market. Nowadays, the online the traders make use of these foreign exchange orders online to make and control different trades. Let us have look below to review different types of orders in foreign exchange online.
Market OrdersThe market foreign exchange orders are used for buying or selling the foreign currencies at the prevailing market price. These orders can be used to either open or close a trade at the current market price.
Stop OrdersThe stop oders in foreign exchange online are a type of exit orders which are used to close trades. These foreign exchange orders online are also called as stop loss orders. Stop orders are meant to restrict the loss amount suffered by a trade. These foreign exchange orders close the trades at when a specified point of loss is reached. Stop orders in forex market can be used to lock in when trades advances into profit.
Entry OrdersThe entry orders in online foreign exchange are used when an investor wishes to enter the trades at a certain market price which is different from the current market prices at that moment. These types of foreign exchange orders online have both merits and demerits associated with them. The merit is that a trader can initiate a trade even when he is away or not monitoring the forex market trades. The demerit is that the market can touch the entry order and take it negative before giving a trader the chance to evaluate the move.
Limit OrdersThe limit orders are the foreign exchange orders which are used to buy or sell trades at a certain price. Limit orders consists of two types of variables which are price and duration. The traders specify the price at which they want to buy or sell a particular pair of currency and the duration for which this order needs to be activated.
One Order Cancels the Other Orders (OCO)Among different orders in online foreign exchange, the one order cancels the other orders are used when a limit order and a stop-loss order are placed at the same point of time. If either of the two orders gets executed the other gets cancelled, thus allowing the forex trader to carry out a transaction without having to monitor the market. In case the market falls, the stop-loss order gets executed and if the market rises to the point specified in the limit order, the currency is sold at a profit.
If Done OrderThe if done orders in online foreign exchange are supplementary orders. The placement of these orders in the market is dependent upon the use of the order with which these are associated.