Depending on the forex broker you use to trade, there may be a slight variation of the order types you can use, but the basics are the same. They all have Market Orders,Limit Orders, Stop Losses etc. There are some additional automated orders that can be triggered at pre-set exchange rates and that can be positioned to control the downside and consolidate the upside. Investor should be familiarized with the various types of Forex orders, so they can protect them and assure more profits in the long run. I am discussing some of the most commonly used forex orders here:

Market Order – It is an order where you can buy or sell a currency pair at the market price the second that the order is processed. Customers utilizing ACM's online currency trading platform click on the buy or sell button after having specified their deal size. The execution of the order is instant; this means that the price assured at the exact time of the click will be given to the customer. Setting a market order by phone is quite similar but normally takes a few seconds more time.

Entry order – It is an order where you can buy or sell a currency pair when it attains a certain price target. In theory, this can be any price. You can set an entry order for the low price of a time period or the high price of a time period. The entry order is also studied by university students under forex trading education.

Stop Order - An order that becomes a market order when a specific price level is achieved and broken. A stop order is placed below the current market value of that currency. The main difference between a limit order and a stop order is that stop orders are ordinarily used to limit loss potential on a transaction whilst limit orders are used to enter the market, add to a pre-existing situation and profit taking. The same variants are used to specify duration as in limit orders (GTC and GFD).

Limit Order - An order that turns into a market order when a specific price level is reached. An order to buy or to sell at a specified price. A buy limit order can only be executed at the limit price or lower (better), and a sell limit order can only be executed at the limit price or higher (better). A limit order is placed above the current market value of that currency. A limit order can also be said as an order placed to buy or sell at a certain price. The order basically contains two variables, price and duration. The trader defines the price at which he likes to buy/sell a certain currency pair and also specifies the duration that the order should remain active. Some forex trading courses cover limit order, OCO order, entry order and stop loss order in their syllabus under forex trading education.

OCO Order – An order placed so as to take advantage of price movement, which comprises of both a Stop and a Limit price. Once one level is achieved, one half of the order will be executed (either Stop or Limit) and the left order canceled (either Stop or Limit). This type of order would lock your position if the market moved to either the stop rate or the limit rate, thereby closing your trade, and, at the same time, canceling the other entry order.

If Done Order – If Done Orders are subsidiary orders whose placement in the market is contingent upon the execution of the order to which it is associated. The If-done order is a kind of orders regarding to combination. It is made by two steps of limit orders or stop loss orders. The first one is filled, the other would work well. In other words, the second order does not go valid unless the first one is executed. You need to pay attention that the If-done order is quite differently from the OCO order.

Position order - Position orders are directly related to individual positions. These orders are only active for as long as the position stays open and can be a stop loss or limit order.

Stop Loss order - A stop loss order is an order type whereby an open position is automatically liquidated at a specific price. It can also be said as an order that becomes a market order if and when a security sells at or below the specified stop price. It is used to defend oneself against a potential downward slide in a security. It is often used to minimize exposure to losses if the market goes against an investor’s position. If someone wants to learn forex, stop loss order is quite important.

Stop Market - Buy or sell at market once the price reaches or passes through a specified price. Used by traders who either have a position (long or short) and want to close the position if it moves against them OR by traders who wish to open a new position once the currency rises to a specific level. The stop price on a sell stop must be below the current bid. The stop price on a buy stop must be above the current offer. Stop orders do not guarantee you an execution at or near the stop price. Once triggered, the order competes with other incoming market orders.

Example: This order type is used mostly for protection. If we are long the EUR/USD at 1.1888, our concern is to not lose more than 10 pips to the downside (Pending trading strategy used). So we would enter a sell stop market order with a stop price of 1.1878.

Stop Limit -Works like a Stop Market order with one major exception. Once the order is activated (by the currency trading at or through the stop price), it does not become a market order. Instead, it becomes a limit order with a specified limit price. The advantage of this order is that you set a specified price at which your order can be filled. The disadvantage is that your order may not be filled. In this case, your exposure to loss will continue until the position is closed.

Example: This order type is used mostly for protection. If we are long the EUR/USD at 1.1888, our concern is to not lose more than 10 pips to the downside (Pending trade strategy used). However, we do not want to be filled via a market order, but rather be filled at a price we specify or better. In this case, we would choose the stop limit order type. You are prompted to enter your stop price and to enter a limit price. So if you set your stop price at 1.1880 with a limit to sell at 1.1878 then you would sell at your price of 1.1878 or better (higher than your limit) if executed.

Some trading strategies encourage a reasonable gap between your submitted stop and limit prices when using the stop limit order type. This is done as a precaution to increase the probability of execution of your limit price, and decrease the potential bypassing of your submitted limit price.

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Different forex brokers may use slightly different terminology for their order types, but they should all be very similar in the way they work. Having a solid knowledge of the various types of orders will enable you to use the right tools to accomplish your intentions - how you want to go into the market, and how you are going to exit the market e.g. profit and loss. Be comfortable using them because wrong execution of orders can cost you money.