Market Order
Generally saying, market order is an order to buy or sell at the current market price. As for as an example, EUR/USD is currently trading at 1.2140. As if you wanted to buy this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon, it’s like using their just a simple-one click ordering. You like the current price, you click once and gotcha; it’s yours! The one and only difference is you are buying or selling one currency against another currency instead of buying something weird or things which are not important to you at the present time.
Limit Order
Limit orders are orders placed by traders to buy or sell at certain prices and normally have the price and duration of the order as oppose to market order. With limit order you either wait for the price to reach the desired figure then place your order or you place your order in advance so that when the exact figure is reached, your order gets executed.
Take Profit Orders
Take profit order is an order placed when you feel that the price will go against you after reaching some positive level, you put your take profit orders to enable you exit with some profit from that particular trade. As oppose to stop loss order which even though your position has been closed but at a negative figure, you have some few losses to deal with.
OCO (One Cancels the Other)
OCO orders are combined orders with both a stop price and a limit price. When one of the orders is executed, the other is automatically cancelled. OCO orders are applicable to open positions, or they can be used to open a new position.
Say for example a trader believes that the UAD/CAD, currently traded at 1.2380/1.23833, will continue trending higher; you believe that should the pair break above 1.2391, it will rise to at least 50 pips. Nevertheless, you expect that prior to this major incline, the pair will retrace to 1.2375. You can place an entry limit at 1.2375, but in case the pair does not hit 1.2375 before climbing higher, you would miss the trade. You then place an OCO order to buy the USD/CAD if it reaches 1.2375 or 1.2391. Of the two, the first bid price to exist in the market will trigger the order.
Stop Loss Order
Traders place stop loss orders to an open position to avoid further losses, if by any chances the price move faster against you, the stop loss order will become your exit strategy. Stop loss order is a good money management practice and traders are normally advised to have them when executing the previous mentioned orders.
Limit Entry Orders
This type of order initiates an open position to sell each time the market rises, or buy each time the market falls. The client believes the market will turn in direction at the level of the order. 1. Buy Entry Limit: An order to buy at a price below the existing exchange value. 2. Sell Entry Limit: An order to sell at price above the existing trade value.
Understanding different types of forex orders and their uses is an essential basic skill. Take your time to study them and try them out using a demo account. And it’d be probably be a great help for you in forex trading.