Types of Forex Orders | Forex Stop Loss

A forex order is executed when a foreign exchange broker performs a currency trade for you.

There are many varieties of forex orders which depend on your analysis of market direction, personal goals and personal trading methods.

Here are the more usual types of forex orders that you will run across:

Market Forex Orders
The most simple and common forex order used by day traders. Basically its just a sell or buy order to be executed at the present market value. The currency pair and amount of trading lots are included in the market forex order.

Generally this is done instantly with the majority of brokers. It should be executed instantaneously at the quoted price.

Limit Forex Orders
An order to sell or buy a currency at a preset price is called a limit forex order. An example would be when USD/EUR are trading at the 1.5 level. Market is bearish so your system indicates value will drop to 1.25 prior to recovery.

Sitting at your terminal monitoring and waiting for the fall and placing a buy order is one option. A better option would be to put in a limit forex order at 1.25 so once it reaches that value, the system will automatically place the buy order.

Of course if your system is off and the price only goes to 1.30 prior to recovery then no order will be completed and at the end of the trading day, the order should be cancelled.

Forex Stop Loss
To minimize losses, seasoned forex traders utilize stop loss orders. For example, your system shows a predicted increase in GBP/USD values so a buy order is placed at 1.8255 along with a stop loss at the 1.8235 level. Somehow your system was not up to par and value dropped to 1.8185.

Because of the stop loss order, the order to sell was executed at 1.8235. Thus you lose only 30 pips instead of 70 pips.

Forex OCO
Short for “one order cancels the other order”. In this scenario, two orders are positioned at prices below and above the current price. Once one order is executed, the other order is cancelled by the system.

This can be very helpful if a currency pair has been trading at a certain level for a long period of time. In your analysis you believe it will move away from this level, though it is not clear if it will move up or down. By placing an OCO order, once the price movement begins, you will be in on it whichever direction it takes. When one of the orders is triggered, the second order is cancelled automatically.

These forex order types are invaluable when it comes to exercising any sophisticated forex trading strategies while at the same time minimizing your risk. To learn about profitable forex strategies that have been tested and proven successful over time, we highly recommend taking some formal training from well-respected forex traders:

1. Forex Trading Made EZ (Easy)

2. Forex Mentor by Peter Bain

3. Forex Profit Accelerator by Bill Poulos