|
When you
open a trade, you may have other commitments so you cannot spend
hours continually watching your computer monitor. To get
around this, you can set up Forex orders. An order is a
request to your broker to buy or sell or to close out your position.
The three
most common types of Forex orders are Market Orders, Limit
Orders and Stop-Loss Orders.
A Market
Order is an order to buy or sell currencies at the current
market price. For example, you will normally open a trade by
making a market order.
---------------
ARTCILE CONTINUES BELOW ---------------
"What
if Earning $2,000 a DAY from
Forex Trading Was As Simple as Running Software That's
Designed to Emulate a Forex-Millionaire?"
And
what if it was actually legit?
It's
not a pipe dream. Literally
hundreds of traders are turning consistent, substantial
profits each month just by running one program:
Forex
Autopilot System (FAPS)
FAPS
is our top-rated trading system on ForexShortcuts.com.
And there's no reason why
you can't start seeing massive results by
riding the tailcoats of others' tried & true trading
systems...
Visit
FAPS or see Our
Full, Unbiased Review
|
------------------------------
A Limit
Order is an order to buy or sell at a certain price. For
example, suppose you buy GBP (and sell USD) when the Forex quote:
GBP/USD = 1.9710/1.9715 (i.e. you issue a market order.) You
could then set up a limit order to sell your GBP, when the Forex
quote: GBP/USD = 1.9760/1.9765 (i.e. when the Forex quote has
increased by 50 pips). You can also put a time frame on your
limit order. For example you can request close the trade at
the end of the trading day, whether or not the price has increased
by 50 pips (GFD). Or you can request the trade to continue until
either the price has increased by 50 pips or you cancel the
trade (GTC).
A Stop-Loss
order is an order to close the trade, if the market moves
against you. Say you buy GBP when the Forex quote: GBP/USD =
1.9710/1.9715. You could make a stop-loss order to close the
trade if the Forex quote went below GBP/USD = 1.9690/1.9695.
This would limit your losses to 20 pips (plus the bid/ask spread).
An Order
Cancels Other (OCO), is a mixture of 2 limit and or stop-loss
orders. For example you could set up an OCO to close your position
if the Forex quote went below GBP/USD = 1.9690/1.9695, or sell
your holding of GBP when the Forex quote: GBP/USD = 1.9760/1.9765.
Good
'Til Cancelled (GTC) - Keep your trade open until you (issue
a market order to...) close the trade.
Good
For Day (GFD) - Close your position at the end of the trading
day 5 PM EST (or 10 PM GMT).
GTC and
GFD are usually used in conjunction with limit orders.
Until you
have gained some experience, it is best to use just the first
three order types: That is, Market, Limit and Stop-Loss orders.
It is especially important that you become used to the Stop-Loss
order before you start trading for real. Otherwise, if the
trade moves against you, you could lose all the money in your
account.
Normally,
no reputable broker will let you continue to trade if your account
goes (or is about to go) negative. Having said that, in volatile
markets currency values can change very quickly, so there is
a small possibility, that you could lose more than the just
the equity in your account. This is only likely however, when
you trade with margins that are too small (e.g. less than 1
percent) i.e. too much leverage, and when you do not have sufficient
unused margin in your account.
|
