Diving into the foreign exchange market is sometimes easier said than done. Traders who now can navigate the foreign exchange market with a blindfold on can probably remember very well their beginning trades and how difficult the process appeared to be. The most important component of the foreign exchange market is understanding the basic principles. The best approach towards grasping the principles of the foreign exchange market is to learn the most important terms, the most useful tools, and always read up on recent trading strategies. To begin, if a trader understands the basics of Forex trading orders, then they essentially hold the keys to the trading market.
What is the Forex Trading Order?
Forex trading orders are essentially the terms used to instruct your broker or for yourself as the trader to conduct actions in the trading market. There is a handful of Forex trading orders that are the most commonly used by all traders. The major Forex trading orders include market orders, limit orders and stop orders.
Types of the Market Orders
The market order is one of the main orders used out of all the various Forex trading orders. Basically, the market order is when a trader buys or sells a currency at the market price by specifying the currency pair and amount of lots he or she is interested in. The trader usually understands that this action is taken with current market prices in mind, but the reality is that there is slippage that occurs. Slippage is a term related to Forex trading orders which means that there is a slip in the currency value between the time it takes to make a market order and when that market order is actually fulfilled. The foreign exchange market is an ever changing beast in which traders must be prepared for slippage to occur. Slippage in Forex trading orders can occur within a manner of seconds, and it might not be dramatic but it is still likely to take place. In case if you want to prevent that, you might also expose to the Forex Robots.
Another major Forex trading orders is the limit order. Limit orders are placed by traders when looking to buy or sell a currency only when it reaches a certain limit. Limit orders can be differentiated from market orders because there is no risk of slippage when dealing with limit orders. Limit orders require consistency and restraint when compared to other Forex trading orders. The stop order is used to trade at a rate below the market.