The trading process can be essentially broken down into two crucial stages: Both are essential in order to fix the trade results. If the objective is to create opening positions right now, then the market order is utilized. If, on the other hand, the execution has to take place at a particular pre-decided price point, then the pending order is to be preferred. Being at your workplace is not necessary as a pending order allows you to trade from remote or other locations. As soon as the pending order is placed, the execution takes place when the price reaches the pre-decided.
The execution takes place even if you close the platform. As far as your forecasts are concerned, the price will rise up to But you cannot sit around and wait for your desired price due to unforeseen circumstances or an emergency situation. In such a scenario, you can put in a pending order to sell only if the price goes below When the pending order is about to be executed, slippages could take place.
A slippage can be described as the market movement that places during the time between the placement of a request and its subsequent execution. Due to a slippage, the execution of your pending order could take place at a slightly higher or lower price than the one mentioned by you. As the execution of your orders will take place through Market Execution, a certain extent of slippage is probably going to take place before your orders eventually end up getting processed.
The primary objective of this order is to minimize loss if the price symbol moves in the wrong direction. Once the price reaches a specified level, the order is closed.
This is classified as a stop order. The primary objective of this order is to take the profit once the price reaches a specified level. Once the level is reached, the order is closed. This is classified as a limit order. The crucial part here is to understand that either of these orders have to be set at such a price that your risk is minimal and your profit is high. When you decide to sell, the ideal situation would be if the Take Profit level is lower than the current price, or if the Stop Loss level is higher.
When you decide to buy, the Stop Loss level should be slightly lower than the price, and the Take Profit level should be slightly higher. Such an order is vital when your intention is to close an order suddenly or immediately.
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