Understanding the in's and out's of placing orders with a Forex broker is an important aspect of protecting from loss and maintaining your gains. How you plan to enter and exit the market must factor into how you place an order. First consider the most basic order types that you will need to learn:
Market orders are the most common and are used to move quickly on an order at the market price. Use this type of order when you wish to enter a new position or when exiting a position.
Stop orders become market orders when you've reached a predetermined price. They are one way to limit loss to your trades and safeguard profits. Similarly, a buy-stop order tells your broker to purchase a currency pair but not until the market is at the price you specified. The sell-stop order then obviously prompts the broker to sell the currency pair when the price hits your target price or lower.
Before you expect to master the art of placing orders, focus on the basics like going into the order with a solid concept of when you plan to exit a position if the market turns bad. Having this kind of foresight means having a stop-loss order in place to limit how much you will lose.
Watching long position pairs that you hope to see gain value means setting a stop-sell point that closes out your position at a certain price. On the other hand, short position watches would better utilize a stop-buy order. For either long or short position you can safely move stop orders into the profit zone when things start moving in the direction of profit - thus protecting long positions from unplanned loss and short positions from losing gain.
Disclimer: This website is for informational purposes only and is not intended to provide
specific commercial, financial, investment, accounting, tax, or legal advice.
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