How to Order with a Forex Broker

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How to Order with a Forex Broker

If you place an order with a forex broker, it is very important for you to know how to order properly. The order must be placed according to how you will trade. That is how you intend to enter and exit the forex market. Incorrect order placement can reduce your entry and exit points. In this article, we will discuss some of the most common types of forex orders.

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Forex trading

Types of Orders on Forex Trading.

Market Order

This is the most common type of order. A market order is used when you want to immediately execute an order at a price on the market, either the bid or ask price displayed on your screen. You can use a market order to enter a new position (buy or sell) or to exit a position.

Stop Order

Stop order is an order that becomes a market order once after a certain price has been reached. This can be used to enter a new position or to exit an existing position. A buy-stop order is an instruction to buy a currency pair at a market price after the market reaches a specified price. The purchase price must be higher than the current market price. A sell-stop order is an instruction to sell a currency pair at a market price after the market reaches a specified or lower price. The selling price must be lower than the current market price.

1. Stop orders are usually used to enter the market when you trade a breakout.

For example: suppose that USD / CHF strengthens to resistance levels and, based on your analysis. You think that if you break above the resistance level, then the price will continue to move higher. To trade based on this opinion, you can make a buy stop order a few pips above the resistance level. So you can change the potential for upside breakout. If the price then reaches or exceeds the price you set, this will open your long position.

Stop orders can also be used if you want to trade with a downside breakout. Place a sell stop order a few pips below the support level. So that when the price reaches the price you specify or below it, your short position will be opened.

2. Stop orders are used to limit your losses.

Everyone has losses from time to time. But what actually affects is a measure of your loss and how you manage it. Even before you enter the forex trade, you should already have an idea when to go out if the market turns against it. One of the most effective ways to limit your losses is through predetermined stop orders, which are usually referred to as stop-loss.

If you have a buy position, say USD / CHF, you will want the currency pair to increase in value. To avoid the possibility of incised uncontrolled losses, you can place a sell stop order at a certain price. So that your position will be closed automatically when the price is reached. Conversely, short positions will have a buy stop order.

3. Stop orders can be used to protect profits.

Once your forex trading becomes profitable, you can change your stop-loss order. Change it in a profitable direction so you can protect some of your profits. For long positions that have become very profitable, you can move the sell stop order. Move from losses to profit zones to protect against possible losses. That is if your forex trade does not reach the specified profit goal, and the market changes against your forex trade. Similarly, for short positions that have become very profitable, you can move your buy stop order. Change it from loss to profit zone to protect your profits.

Limit Order

A limit order is placed when you only want to enter a new position. Or to get out of the current position at a certain price or better. The order will only be filled if the price is traded in the market or better. A buy limit order is an instruction to buy a currency pair at a market price after the market reaches a specified or lower price. The price must be lower than the current market price. A sell limit order is an instruction to sell a currency pair at a market price once the market reaches a specified price. Or higher, the price must be higher than the current market price.

1. Limit orders are usually used to enter the market when your breakout fades.

Your breakout fades when you don’t expect currency prices to break through resistance or support levels. In other words, you expect that the price of the currency will bounce from resistance that will drop or bounce from support to rise higher.

For example: You think that the current USD / CHF rally movement does not seem to be able to successfully overcome resistance. Therefore, you think that this will be a good opportunity to sell when the USD / CHF rally approaches that resistance. To take advantage of this theory, you can place limit sell orders a few pips below the resistance level. So that your sell orders will be filled when the market moves to a certain price or higher.

Besides using limit orders to approach resistance, you can also use this order for buy orders that are near the support level. For example, if you think that there is a high probability that the current decline in the USD / CHF will stop briefly and turn closer to a certain level of support. You might want to take the opportunity to make a buy order when USD / CHF drops to the level that approaches that support. In this case, you can place a buy order limit a few pips above the support level. So that your order will fill when the market moves down to a specified or lower price.

2. A limit order is used to determine the purpose of your profit.

Before placing your forex trading, you should already have an idea of ​​where you want to take advantage if the forex trade goes according to your wishes. Limit orders allow you to exit the market at predetermined profit goals.

Execution of the Right Order

Having a strong understanding of the various types of orders will allow you to use the right tools to reach your intentions. Or how you want to enter the market and how you will get out of the market (profits and losses). Although there may be other types of orders, markets, stops and limit orders are the most common. Be comfortable using it because improper order execution can cost a lot of money.

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Forex Signal 30 is the best forex system since 2009 and has been used by thousands of traders from around the world to generate profit in forex trading. This system is created by our team of Brilliant Forex Signal Team, this system is made as simple as possible for beginner and professional traders.
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