In the forex market, you have the option to control your trades with types of forex orders. Among these various orders, some of them allow you to control both of your entry and exit, while some others don’t. Understanding how those orders work will help you control your trades better.
If you use market orders, your trades will be executed directly on the market at that current market. Traders who use this order usually concern so much on getting into the market at that moment directly, they do not put so much concern on the spread.
With market orders, you can open or close your trades at the current market price.
Traders usually use market orders to exit trades with a big profit. If you use a limit order while you are going long, then your limit order will be higher than the market price.
On the other hand, if you go short with a limit order, then your limit order will be below the market price. Imagine a limit order like a finish line. Your trades will be directly closed every time the market price crosses your limit orders.
Some traders also refer to stop loss order as a stop order or protective stop order. Similar to limit order, this order will also exit your trades.
With a stop-loss order, your trades will be closed at a designated loss. It is painful, whenever your stop loss gets hit. But, remember these orders help you keep your trading game longer.
Entry order helps you enter the forex market at a specific price. As we all know, there is no way to monitor the market every second. Thus, an entry order can give you a big help.
Commonly, traders use this order if they feel like there may be a breakthrough at a price, yet it is still touching and not yet break. Whenever the market price crosses your limit order, you will automatically enter the market.
Yet, this entry order can also be a double-edged sword. The main advantage is you can enter the market without always paying attention to the market moves. Yet, the disadvantage os the market price can cross your order anytime, even before you have a chance to evaluate the move.
Thus, in using these orders you always have to use risk management.
Writer: Lisa Ramadhani