Different Orders Of A Trader
A trader has different kinds of orders at his convenience while trading in FOREX. It is however important that a trader understands each kind of order to become truly successful in trading.
The Market Order - This is the order of buying and selling at the present price in the market. This order can be useful in entering or exiting a business or trade. These orders however should be carefully used since in the markets which moves fast there could be a difference in the price of the market at that time when the order was given and the price for the actual business transaction and this is because of slippage which pertains to the price or amount generated when the market gets to move even the seconds while giving this order and then employing it. Slippage can indeed result in either the gain or the loss of many pips.
The Limit Order - This is the order for buying or selling at a particular limit. This order can be employed to buy currencies that are below the market rate or to sell currencies that are above the market rate. In a buying scenario the order is applied when the market goes down to the trader's limit of ordering rate or price. In the selling scenario this order is applied when the market goes up or rises to the limit ordering price. The good thing is that slippage doesn't exist when it comes to these orders.
The Stop Order - This is the order given by the trader to be able to purchase above the forex market or to sell beneath the forex market. These are usually used for stopping losses in the goal of limiting the losses if anything unfortunate happens.
The OCO order which stands for One Cancels the Other - This is the order that is used for placing the limit order and the stop-loss together at one time. When either of the two orders is done the other order should be cancelled, this will allow traders to make the transaction without having to monitor the movements in the market so when the market goes down, the order for stop-loss will be applied however when the market goes up the limit order's level, the currency will eventually be sold. There are actually four kinds of the stop-order in the foreign exchange. These are the equity stop order, Chart stop, volatility stop and the margin stop order.
Knowing these will help a trader become the best trader and successful in their ventures.