Trading is one of the most elite class professionals in the world. Skilled traders in the Forex market have mastered the art of trading through lots of hard work. They are not executing the trades based on some random trade execution, but rather they are placing the trades with very strict logic. You may be new to the trading profession, still, you have a lot to learn. Never step back just knowing the statistics of the losers in the Forex market.
Success requires hard work, patience, diligence, and most importantly devotion. Today we are going to discuss the five most common types of orders you need to know. Most of us are familiar with the instant order but this is not going to help when you consider trading as your fulltime profession. Let’s explore and learn about the five most prominent types of orders.
Instant execution is the most common type of order used by the traders. Just by placing the buy or sell button the trades are being placed in the market. The majority of the traders are relying on the instant order type to make a vigorous profit at trading. But things become extremely limited when you depend on the instant type of orders. At times, you need to use some advanced orders as they significantly boost your profit factors.
Buy limit is a special kind pending order where the trades get automatically triggered. Let’s say the price of EURUSD is trading at 1.1230 level. You expect the price to fall to 1.1210 level since that level is the major support level of the pair. So, instead of waiting for the price to drop, you can set the buy limit at 1.12210 level. So, if the price reaches that level, the normal buy order will be automatically executed in the EURUSD pair. By using such pending orders you can easily save a huge time. But make sure you use the best Forex broker in Australia so that you don’t experience unnecessary slippage.
The sell limit is the opposite of the buy limit. You are expecting the price of a certain asset to rise to a certain level. After reaching that level, the price is most likely to drop. So, set the sell limit at that certain resistance level. If the price reaches that level, the sell orders will be automatically executed in the market. And if the price drops as per your prediction, you are going to make a decent profit.
Buy stop is mostly used to trade the breakout. If the price breaks a critical resistance level, it’s most likely to reach the next level. The traders use the buy stop right above the resistance level. Let’s say, the resistance for EURUSD pair is at 1.1260 level. If it breaks above the 1.1260 level, the price is most likely to rally higher. When you use the buy stop orders make sure you use predefined stops or else you might have to lose a big sum of money.
Sell Stop is just the opposite of the buy stop order. When the price breaks a critical support level, the price is most likely to drop furthermore. So, you can set the sell stop orders right below a critical support level. If the price breaks below the support level, you can expect a strong bearish rally. And the sell stop orders can save your time by automatically opening short orders in the market. Never forget to set the stop loss when you use the sell stop orders as it greatly increases the risk factors at trading. And always remember the fact, you are bound to lose some trades. So, don’t forget to reduce the risk exposure by using proper money management.