Order

The market order is the instruction you give to a broker to buy or sell a financial instrument. In the Forex market and other financial markets, there are two main types of orders.

Market Orders: These are orders in which you instruct the broker to buy or sell at the current market price.

Pending Orders: These are instructions to your broker to execute a transaction at a predetermined price and specified volume. This type of order sets the transaction to occur at a specific level.

Let’s say, the analysis concluded that the price will reach the projected level and somehow go near that level. This is when you command your broker to establish a certain type of pending order.

In general, the deferred order is very convenient as it allows you to not sit at the computer all day, and you can build different strategies for entering and exiting the market.

There are four types of pending orders:
· Buy Limit
· Buy Stop
· Sell Limit
· Sell Stop

A “Buy Limit” order is when the broker opens a position to buy if the ask is less than or equal to the limit price. In this case, when you expose such an order, the current level of prices should be higher than the price at which you expose your Buy Limit. Typically, such an order is placed when the forecast that the price falls to a certain level and begins to grow again.

A “Buy Stop” order is placed when you instruct the broker to open a buy position if the ask price reaches or exceeds a specified limit price. This type of order is set when the current price is below the target price at which the order should be executed.

A “Sell Limit” order instructs the broker to open a short position if the bid price reaches or exceeds the specified limit price. This order is typically placed when the current price is below the Sell Limit.

A “Sell Stop” order is placed when the current market price is higher than the target price at which the Sell Stop is set. This order instructs the broker to open a short position if the bid price is less than or equal to the limit price.

There are also two other orders In the market: Take Profit and Stop Loss.

“Take Profit” order is an order to close the open position to achieve the predicted level. Such orders are used to lock the position in profits.