Understanding The Different Types of Trading Orders in Forex

Which types of trading orders exists in Forex?

The most popular and common trading terminal MetaTrader offers 8 types of trading orders, two of which have appeared in the last generation platform. According to the fundamental principles all orders are divided into two groups:

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1. Market order. The immediate buy or sale of certain financial assets at the best current market price. The simplicity of this type led to the fact that many traders often use it as the only way to open a position.
2. Pending order. Order to buy or sell a financial asset, subject to specified parameters. The main difference from the market order is that after sending an order the transaction is not instantly executed. The order is processed and is waiting for a match with the necessary parameters. The waiting time can be very long, but as soon as all conditions are matched, the system automatically opens a deal.

Market trading orders can be only two types: buying and selling. In both cases, the mechanism is very simple and clear: the transaction is opened immediately after you press the corresponding button in the terminal window.

The other six trading order types belong to the group of pending orders and have more complex principles. Using these features allows you to trade in a more flexible and less time-consuming way. Many professionals open position only by means of pending orders and thus spend a few minutes a day to analyze the market and identify the entry points.

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Let’s look at all types of pending orders, to learn how to use them in our daily work:

Buy Limit

Buy limit is an order for the purchase of a financial asset at a price below the current one. In this case, the trader expects a further decline, after which follows the rise. Use of this type of order to avoid long-term observation of the schedule in advance to form an order to buy at a better price.

Sell Limit

an order to sell at a price higher than the current one. As in the case of a warrant Buy Limit, the trader expects to receive more favorable conditions for opening a position. It is expected that the price still has some time to grow, and then begin to decline.

Buy Stop

an order to buy at a price above the current one. At first glance it seems that this tactic does not make sense, since there is no need to buy less than a good price, if there is confidence in its growth. This order type is suitable for cases where there is a strong level of which depends on further price movement. Using a warrant Buy Stop allows you to protect yourself from loss due to premature opening of the transaction.

Sell Stop

an order to sell at a price lower than the current one. It is used to protect against premature transactions, which are not confirmed. Also Stop-orders can be used as a filter in rash decisions. For example, in an emotional impulse you open not a market, but a pending order. In case of change of price movements which are not in your favor the deal is simply not open.

Buy Stop Limit

this order type has been added to the fifth version of the MetaTrader terminal. Expressed as short as its essence, it is delayed by the order for issuing a pending order to buy. In the course of trade is as follows: first, the price reaches a higher value of the order Buy Stop, which then sends the request to create a Buy Limit at a lower price. As a result the transaction will be opened when the price hits Buy Limit.

Sell Stop Limit

similar to the previous type of order, created for the opening of transactions on sale. It is a combination of Sell Stop and Sell Limit. Combined orders perfectly consistent with the Elliott wave theory, according to which the trend is composed of a main movement and correction. After this adjustment is made the transaction opens.

We hope you have enjoyed our deep dive in which types of trading orders exist in Forex.

If you wish to learn more about trading Forex, we recommend our Forex Education section.


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