After talking about the forex market and its basics, explaining currency pairs, and covering the concept of spread in the foreign exchange market, in this tutorial, we will talk about the types of buy and sell orders that any trader can place in forex.
You should get to know them in the foreign exchange market and know the difference between them before you start trading forex.
Trading orders in the forex market have a variety of purposes, including those used to enter a transaction in the market, as well as helping a trader maintain profits while trading or limit the risks he or she faces when trading in the foreign exchange market. To be able to trade properly, you must know the difference between each of these orders.
Spot trade orders or market orders
Spot orders or market price orders are the simplest types of orders in the forex market and other financial markets where a trading broker places a buy or sell transaction through the trading platform at the best price currently available in the market. One of these commands:
Market Order: An order in which the transaction is executed at the best available bid price:
Sell Market Order: Sell A transaction in which a trade is executed at the best available selling price.
Close order: used to exit the current position. If the main transaction is a buy transaction then it is either a sell order or if the main transaction is short then it is a buy order.
On the trading platform, you will see the current market price of the buy order, sell order, or close order at which the current transaction will be executed.
Pending orders or buy and sell orders
Pending buy and sell orders are placed at a price different from the current market price and are inactive unless the price reaches the level set by the trader. The need to stay in front of the screen to see the price. Pending buy and sell orders are divided into the following sections:
First: They are orders to buy at a price lower than the current market price or to sell at a price higher than the current market price, and this means that there are orders placed because the trader believes that the prices will return. A deal is entered into just before they complete their cycles because better rates can be obtained at current prices. We will explain these commands in the following lines.
Buy Limit Order: A pending buy order placed by a trader in the forex market to buy at a price lower than the current market price, i.e. a better buy price than the current market price.
Example: Let's assume that the price of the Eurodollar is in an upward trend and that its current price is 1.17250 and you are waiting for the price of the Eurodollar to drop slightly to 1.17220 levels before the prices complete the upward trend, in which case you will buy. Limit order at 1.17220 to take advantage of better buy prices at the current price.
Sell Limit Order: In the forex market, it is a pending sell order placed by the trader to buy at a price higher than the current market price, i.e. a better selling price than the current market price, which is the opposite. . specific purchase order.
Example: Suppose the price of the Swiss Franc is in a downtrend and its current price is 0.90910 and you expect the price of the Swiss Franc to rise slightly to levels of 0.90975 before the prices complete the downtrend. In this case, you would place a sell limit order at 0.90975 to take advantage of a better sell price than the current one.
Second: Stop orders, which are orders to buy at a price higher than the current market price or sell at a price lower than the current market price, and they are often used in the breakout strategy, and this means that the trader believes. Prices have exceeded certain areas and will continue in the same direction without change, and we will explain these orders in the following lines.
Buy Stop Order: A pending buy order placed by a trader to buy at a price higher than the current market price in the forex market; This means that the price believes that it will continue in an upward trend if the price exceeds or breaks certain resistance areas.
Example: Let's assume that the price of Dollar Yen is in an upward trend and that its current price is 104,311, but the price is facing fierce resistance at 104,500 and you expect the price to continue its strong upward movement in the event of a break. for example, you would place a buy stop order at 104,550 and in this case, the buy order will be activated immediately when it reaches the price specified in the order or at a price higher than it. for liquidity in the market.
Sell Stop Order: A pending sell order in the forex market that a trader places to sell at a price lower than the current market price, meaning that the trader believes that if the price is broken, it will continue to fall. Special support areas. It is the opposite of a buy-stop order.
Example: Let's assume that the Eurodollar price is in a downtrend and its current price is 1.17470, but the price is ahead of strong support at 1.17350 and you expect the price to continue at its level if it collapses. Strong downward trajectory. In this case, for example, you would place a sell-stop order at 1.17250. In this case, when the sell order reaches the price specified in the order, it becomes active directly or at a price lower than the liquidity in the market.
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Forex trading