Types of Forex orders

There are various forms of order types that can be used in Forex. We will cover the most common types first and then outline some of the less common types of orders used by traders. The order is simply how you will enter or exit the trade. One of the reasons why it is important to understand order types is because different platforms will allow you to enter a trade different ways.

Following are the most common order types that traders use and that we use at LTG GoldRock.

• Market order
  A market order is simply an order to buy or sell at the current market price which is the first available order on offer. For example, AUD/USD is currently trading at .68. If you wanted to buy at this price, you would click buy and your trading platform would be filled at the first available offer. This is most commonly used order type in Forex as it is the most simple and gets you into the market immediately.
• Limit order
  A limit order is an order placed at a price that you wish to buy or sell. Rather than accepting whatever is on offer a limit order is a price you nominate to buy or sell at. It can be used to enter a trade or exit a trade at a pre determined price target.
• Stop-loss order
  A stop-loss order is a limit order that you will nominate into your trading platform to tell the market at what price you wish to exit if the market moves against you. A stop loss order will limit the loss potential.
• OCO (One cancels other)
  An OCO order is another popular order type that simply is used most commonly by traders who set a profit target and a stop loss for a trade they place. LTG GoldRock always uses profit targets and stop losses and uses OCO orders regularly. What it means is that once one order (profit target) is hit and executed the other order (stop loss) is cancelled. This ensures you don’t have an order sitting out in the market that could be executed.

There are also other order types that are used in Forex that you will likely use. These are not so commonly known however you should learn about them.

• GTC (Good till cancelled)
  A GTC order is an order you place that remains in the market until you decide to cancel it.
• GFD (Good for the day)
  A GFD order is an order that remains in the market until the end of the trading day. Foreign exchange is a 24-hour market, and a GFD order usually is good until the US market closes.  However if you wish to use a GFD order it is best that you ask your broker what time they reference as the close of the day.

Make sure you check with your broker on what types of orders you can use with the platform.