How to Place Different Types of Forex Trading Orders
In this page we explain about the different forex order types available for online Forex trading. The most important things to remember about placing a Forex trading order is this: Always understand the orders you place. Never place an order which you are not entirely knowledgeable about. You'll be able to see the orders available for you after you open your trading account, so soon after check and learn about the different ones you can make.
There are various Forex trading order types to choose from, and each order has its advantages and disadvantages, which will described in later pages.
Market orders are the most basic Forex trading orders that are bought and sold for the current market price. With market orders, the transaction is done regardless of the price. The Forex trading software gives you real time prices, so you can decide exactly when to execute a market order with ease. Market orders are perfect for situations where you follow a certain currency up close. The minute you want to enter a position you can buy and sell the currency at a click of a button using Forex trading market order.
The main thing to remember about market orders is that they are executed for the current market price, and that this is beneficial if you want to instantly enter a position.
The process of placing Forex trading orders is like so:
- 1. First you specify the currency pair and the size of the deal. Let's say the EUR/USD pair quoted 1.2603/06, for 2 lots of $100 each.
- 2. Next you choose to either sell each EUR for 1.2603 USD (bid price), or choose to buy each EUR for 1.2607 USD (ask price).
- 3. Finally, the transaction is confirmed by your dealer. This only takes a few seconds for Forex trading orders.
GTC (Good 'Til Canceled)
This is one of the simplest of Forex trading orders. All it means is that the order you place remains active until you cancel it.
GFD (Good for the Day)
This order is sometimes named GTM or Good 'Til Market close order, and remains active until the close of the daily Forex trading.
OCO (Order Cancel Other)
OCO stands for Order Cancel Other or Order Cancel Other, and it is a Forex trading order that is used when you place two limit orders or two stop orders. When one of the orders is executed the other is cancelled.
"If Done" Orders
This Forex trading order is executed only when the previous order is also executed. This way you can work on other currency orders and not have to worry about executing of a specific order. An "if done" order can be illustrated with the following example. Let's say you want to buy a certain currency, but also want to place a stop to make sure you do not lose much money on the trade. You then place two Forex trading orders- one for the first buying of the currency, and the other for the stop. The second order for the stop will be placed as an "if done" order, in order to make sure that the stop will be placed only when the first order is filled.