You would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon. The only difference is you are buying or selling one currency against another currency instead of buying a Justin Bieber CD. A limit entry is an order placed to either buy below the market or sell above the market at a certain price. You want to go short if the price reaches 1.
You can either sit in front of your monitor and wait for it to hit 1. Or you can set a sell limit order at 1. If the price goes up to 1. You use this type of entry order when you believe price will reverse upon hitting the price you specified! A stop entry order is an order placed to buy above the market or sell below the market at a certain price. You believe that price will continue in this direction if it hits 1.
A stop loss order is a type of order linked to a trade for the purpose of preventing additional losses if the price goes against you. A stop loss order remains in effect until the position is liquidated or you cancel the stop loss order. To limit your maximum loss, you set a stop-loss order at 1.
A trailing stop is a type of stop loss order attached to a trade that moves as price fluctuates. This means that originally, your stop loss is at If the price goes down and hits Just remember though, that your stop will STAY at this new price level. It will not widen if market goes higher against you.
Once the market price hits your trailing stop price, a market order to close your position at the best available price will be sent and your position will be closed. A GTC order remains active in the market until you decide to cancel it. Your broker will not cancel the order at any time. Because foreign exchange is a hour market, this usually means 5: Two orders with price and duration variables are placed above and below the current price.
When one of the orders is executed the other order is canceled. You want to either buy at 1. The understanding is that if 1. You set an OTO order when you want to set profit taking and stop loss levels ahead of time, even before you get in a trade. You believe that once it hits 1. The problem is that you will be gone for an entire week because you have to join a basket weaving competition at the top of Mt. Fuji where there is no internet.
In order to catch the move while you are away, you set a sell limit at 1. As an OTO, both the buy limit and the stop-loss orders will only be placed if your initial sell order at 1.
The basic forex order types market, limit entry, stop-entry, stop loss, and trailing stop are usually all that most traders ever need. Stick with the basic stuff first. Also, always check with your broker for specific order information and to see if any rollover fees will be applied if a position is held longer than one day. DO NOT trade with real money until you have an extremely high comfort level with the trading platform you are using and its order entry system.
Erroneous trades are more common than you think! When you go in search of honey you must expect to be stung by bees. Partner Center Find a Broker.More...