Types of Forex Orders

Learning how to read forex charts and building a forex strategy requires knowing the types of forex orders. Here you will learn what type of forex trading is best for beginners.

Market Order

A market order is a buy or sell order that is placed at the instant market price. This forex order type is executed at the moment the order is placed. The customer who places a market order either buys or sells the instrument chosen according to the instant price.

Stop Loss

In sales, the trader inputs a specified price level above the price entered in the trade. A stop-loss order ensures that the position is automatically closed when the price reaches that level (stop-loss level). In purchases, the price level that is determined below the current price is entered. The position is closed automatically when the price reaches the determined level.
A stop-loss order is a type of order that allows the trader to specify the level of loss that can be incurred and to prevent further loss. It is used for both buy and sell orders.

Take Profit

In purchases, the trader inputs a level above the price entered in the trade. A take-profit order ensures that the position is closed automatically when the market price reaches that level (take-profit level). In sales, on the other hand, the price determined below the current price is entered, and the position is closed automatically when the price reaches that level.
The TP order is a forward-looking close order, and the function of this order type is to close the position with profit. A TP order is placed with the prediction that the market price will not rise further. It helps the trader close the transaction at the point where the target profit is reached.

Buy Stop

It is an order type that is used to enter a buy order at a price above the current market price. Although it does not seem logical to buy instruments at higher prices, the trader uses buy-stop, expecting that the price will rise faster when it breaks the pre-set level.

Sell Stop

The sell-stop order type is to enter a sell order at a price below the current market price. It does not seem logical to sell at a lower price either; just like buy-stop, the trader uses sell-stop orders when she/he expects the price to drop rapidly when it breaks a certain level.

Limit Orders

Limit orders are orders that automatically open a position when the market price reaches the optimum level determined by the trader.

The two types of Forex limit orders are:

Buy Limit

The trader, who has the expectation that the market price will reach a lower level than the current level, can place a buy limit order at the price level he has set and perform automatic transactions when the price reaches the desired level. These types of orders are buy-limit orders. Buy-limit orders are placed only for long positions.

Sell Limit

Believing that the market price will rise to a higher level than the current level, the trader can perform automatic transactions when the price reaches the desired level. The trader places a sell-limit order at the price level he has previously set. These types of orders are sell-limit orders, and they are placed only for short positions.

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