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Forex Trading Education - FX Order Types |
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Being acclimated with the different types of orders and properly placing them is important. With quickly changing market conditions, sometimes every second can count and understanding which order type is appropriate and placing it correctly can be a crucial factor to your trading success. Market Order A market order is an order to buy or sell at the current market price. The execution of the order is instantaneous, this means that the price seen at the exact time of the click will be given to the customer. Placing a market order by phone is quite similar but usually takes a few seconds more time. The exact process goes like this: 1. A customer specifies the currency pair and the deal size to the dealer. Whether you choose to deal with Aaron Trading or another firm, you should be aware that it is a correct practice for institutions to quote two-way forex spreads to a customer who wishes to trade. A firm that does not do so is almost certainly taking advantage of their customers' ignorance as far trading procedures are concerned. Limit Order This order initiates the trade at a specific price 'or better' if able. For example, Traders should note the market may hit the limit price and yet not fill the order. Limit orders to buy are placed below the currency market price and limit orders to sell are placed above the current market price. Stop Order This order becomes a market order only when the specified price level is reached. A buy stop is placed above the market and a sell stop is placed below the market. If Done / When Done (Also referred to as a contingency orders or conditional orders) A if done order will only become activated when the order to which it is attached is executed. One Cancels Other (OCO) (Also referred to as a contingency orders or conditional orders) An order where if one order is filled, the other order is canceled GTC (Good Until Canceled) These orders often called open orders are always considered active orders until filled, canceled, or replaced by another order. GTV (Good Till Value Date) These orders, often called open orders, are always active until the GTV date. Straight Cancel This completely eliminates a previously placed order Cancel/Replace This cancels & replaces a previous order by changed the price, type, or quantity. |
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