Forex Orders Explained

Forex Orders Explained

A market order is an order to buy or sell which is to be filled rapidly at the current exchange rate quotation under normal market conditions. A market order is what you use when you want to execute an order immediately at the current market price, it is displayed as a bid or ask price. The information in this article is a brief introduction to understanding today's Forex Market Order.

Entry Orders: An order, stop or limit, initiating an open position and executed when a specific price level is reached and/or broken. The execution is handled by the dealing desk and the order is in effect until canceled by the client.

Limit Entry Orders: These are orders that initiate an open position to sell whenever the market rises, or buy whenever the market falls. The client believes the market will reverse the direction at the level of the order.
1. Buy Entry Limit: An order to buy at a price below the present trade value.
2. Sell Entry Limit: An order to sell at a price above the existing market.

Entry Stop Orders: This type of order initiates an open position to sell each time the market falls, or buy each time the market rises. The client believes that prices will continue to move in the same direction each time the previous momentum after hitting the order level.
1. Buy Entry Stop: An order to BUY at a price ABOVE the current market.
2. Sell Entry Stop: An order to SELL at a price BELOW the existing exchange value.

Limit Orders: A limit order placed on a Buy position is a limit entry order to SELL that position; this is for the purpose of locking in the gains on an existing position. A stop-limit order remains operational until the position is liquidated or the client cancels the stop-limit order.

OCO (One Cancels the Other): A stop-loss order and a limit order linked to a specific exchange position. One order, the stop, is to prevent additional loss on the exchange position, and one order, the limit, is to take profit on the exchange position. When either order is executed, closing the exchange position, the other is automatic a canceled.

Stop-Loss Orders: A stop-loss is an entry order linked to a specific trade position for the purpose of stopping the trade position from accruing additional losses and a stop-loss order placed on a buy trade position is a stop entry order to sell linked to that trade position. A stop-loss order remains effective until the trade position is liquidated or the client cancels the stop-loss order. While a stop-loss order on a sell trade position is an order to buy that trade position; keep in mind that each stop-loss orders remain effective until the trade position is liquidated or canceled by the client.

Any stop-loss orders remain effective until the position is paid off or canceled by the client. While a stop-loss order on a sell position is an order to buy that position.
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