Types of Orders: Perfect Entry and Limited Loss
Time is crucial for traders. Imagine you analyze the market but don’t see a perfect entry point to open a position now. What should you do? Enter the market with a high risk of loss? Wait until the market reaches a better point? In both cases, you either waste money or your time. That’s why different types of orders were created. Let’s learn how they can help you trade in the market.
What Orders Are and Why Use Them
Simply stated, an order is an act of buying or selling a security. You all know the phrase “place an order,” which means to make an action with security in the market.
If you trade on Forex, you do it through a broker. Thus, to place an order means to give special commands to your broker via a trading terminal. You can either place an order right away or wait for better conditions. Here, different types of orders appear.
To place an order means to give special commands to your broker via a trading terminal.
However, the order doesn’t only relate to the opening of a position. Through an order, you can exit the market or limit your losses if your trade moves in the opposite direction you expected. Let’s consider each possible type of order.
How to Place Trading Orders: MT4 Guideline
No matter what kind of order you choose, it is placed with several simple steps.
Market Order
Step 1. Open a security you want to trade. We choose the EUR/USD pair. Click “New Order.”
Step 2. Pay attention to the “Type” window. Here you will find Market Execution and Pending Order.
Step 3. Market Execution order is set by default. Thus, to place a market order, it’s enough to click sell or buy, and the order will be filled immediately.
Step 4. Here, you also see take profit and stop loss windows, where you can type the levels, you have chosen.
Pending Order
The process is almost the same.
Step 1. Open the security you want to trade. For instance, the EUR/USD pair. Choose “New Order.”
Step 2. In the “Type” window, select “Pending Order”.
Step 3. A new “Type” window will appear. Here, you will need to choose the type of pending order.
Step 4. Type the level at which you want the trade to be executed.
Step 5. Click “Place.” “Stop Loss” and “Take Profit” levels are also available here.
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