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Any trading order must be adapted not only to individual goals & strategies but also to the current market conditions.

ONLINE FOREX TRADING ORDERS

Placing the appropriate trading is essential for all Forex Traders. The placement of any trading order must adapt not only individual goals & strategies but also to the current market conditions.

 

Volatile market conditions, for example, require the placement of wide orders and the implementation of scaled positioning. Furthermore, the placement of any order must be in absolute accordance with the rate of Capital Leverage used. For example, when a wide stop-loss order is placed in a volatile market, it shouldn’t be combined with high capital leverage.

By summarizing all the above here are the major factors affecting order placement:

◙ Individual Goals and Strategies

◙ Desired Exposure to Risk

◙ Desired Profit / Loss Ratio

◙ General Market Conditions (Volatile, Trending, Ranging Markets)

◙ Technical Analysis (Support / Resistance, Trendlines, Pivot Points)

◙ Capital Leverage

Forex Trading Order Types

These are the most important Forex Trading Orders including Market Orders, Good-Till-Canceled orders, Good for the Day order, One-Cancels-the-Other order, Stop-Loss order, Trailing Stop order and Take-Profit order.

 

(1) Market Orders

Market orders are filled at the best current market price available. This order type can prove very risky when trading in Volatile Markets and/or with high Execution Delays.

■ Buy rate (best current available market offer price)

■ Sell rate (best current available market bid price)

Traders should prefer Forex Brokers who are offering Forex trading with the minimal latency.


 

(2) Good-Till-Canceled (GTC)

This is a typical order type that stays in the market until it is filled or until it is canceled.

■ Buy rate (predetermined by the trader)

■ Sell rate (predetermined by the trader)


 

(3) Good for the Day (GFD)

A Good for the Day order remains active until the end of the trading day and either it is filled within the trading day or it is canceled at the end of the day. As the Foreign Exchange market operates 24/5 the end of the day is determined by the server-time of your Forex Broker.


 

(4) One-Cancels-the-Other (OCO)

The one-cancels-the-other order includes multiple trading orders. This mixture of orders may involve two entry orders or/and stop-loss orders. When one of these trading orders is filled then the other order is automatically canceled. For example, let’s say you want to trade an important price breakout but you are not sure that it will actually occur. In that case, you place a Long and a Short order at the same time. If the Long order is filled then automatically the Short order is canceled and vice versa.


 

(5) One-Triggers-the-Other (OTO)

The one-triggers-the-other order is the exact opposite order than the One-Cancels-the-Other. You place again two orders. If one of these two orders is filled then another order is triggered and filled too.


 

(6) Stop-Loss Orders

In general, a stop order is an order type to trade the market at a predefined level. A stop-loss order protects your capital by limiting the loss potential of any trade. For example, if the important news is about to be released by the FED and you are long on EURUSD you want to limit the impact of news on your trade. This type of order is extremely important especially for traders who are using high capital leverage. These are some general guidelines when using a stop-loss order.

■ Don’t place a stop-loss too close, especially in volatile markets

■ Place a stop-loss below major support when you are Long and above major resistance when you are Short

■ Place a stop-loss by respecting the major trendlines of any movement

■ Place a stop-loss by respecting the major Pivot Points (usually, the trend reverses when it reaches a major Pivot Point)


 

(7) Trailing Stop Orders

A Trailing-Stop order is similar to a common Stop-Loss except the fact that it is not a fixed-price order. A trailing stop is dynamically changing according to the current market conditions. A trailing stop will automatically close any trade if the price moves unfavorably by a prespecified distance. For example, you can place a 21-pip trailing stop-loss. That means that any time the market moves unfavorably 21 pips your trade will be closed automatically. This is particularly important for traders who want to follow a strong trend with unlimited profit potential and limited loss potential. This order type secures your profits at any time and it is very useful for News-Traders.


 

(8) Take-Profit Orders

A take-profit order is an order that closes a trade with a predetermined profit. If a Forex Pair reaches a pre-specified rate then this order automatically closes your open position. You should place a Take-Profit order wisely and put it according to the current market conditions.

 

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Forex Trading Orders

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