The forex market trading is not similar to trading schemes that we see in stock markets. There are a lot of dissimilarities and we can say that even experienced stock traders are going to feel like complete beginners when they deal currency with brokers. Out of all the differences one of the most important one can be found in the different forex order types. Let us take a look at the 4 most important varieties.
The Market Order
The market order stands out as the simplest of all forex order types. It deals with selling and buying orders done at the current prices noticed in the market. The orders are utilized in order to exit and enter trades while the entire forex market will constantly fluctuate. Due to the fluctuations noticed the market is going to often place orders at a price that is not the one that was bid on. Such a difference between the actual price and the bid price in a market order is a slippage. Many pips can be lost or gained because of slippage.
1) Buy order
2) Sell order
3) Be flat This is not joke. Be flat is position.And 80% of all time you will be flat.
4)The Limit Order
The limit order stands out as a sell/buy forex order that falls under different limits. They are to be used in order to buy a currency under the actual price of the market or to sell above an actual listing. The orders will work according to movements noticed in the market. When we see the market falling to required limits we see buying while selling will be done when a desired limit is reached in the market. With limit orders we are not going to notice any slippage.
5.The Stop Order
Such a forex order will be used in order to sell or boy above current market rates. Traders that use this order type will do so in order to limit losses and they will always prefer this choice. When the currency will fall below certain levels trades will automatically close and this will prevent further losses.
6. OCO (One Cancels the Other)
In the event that both the stop loss orders and the limit orders are used at the same time we are going to notice OCO orders being used. In the event that a condition is met we will see that the other condition will be negated immediately. Thanks to this there will not be a need to constantly monitor trades. In the event that the market will fall we will see the stop loss order executed. If the selling limit will be reached then the chosen currency is going to be sold in order to gain profit.