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Wednesday, September 29, 2010

Forex Order Types

Market Order

Market order is an obligation to buy or sell the currency at the current market price. The execution of this command will result in immediate opening of a trading position. Currency pairs are bought at a price and selling a BID ASK price.
Pending Order

Pending order is the client’s commitment to buy or sell a currency pair at a pre-defined price in the future. This type of orders is used for opening of a trade position provided the future quotes reach the pre-defined level. There are four types of pending orders available in the terminal:

1. Buy Limit —an order to open BUY a position at a lower price than the price at the moment of placing the order. Orders of this type are usually placed in anticipation of that the security price, having fallen to a certain level, will increase.


2. Buy Stop — an order to open BUY a position at a higher price than the price at the moment of placing the order. Orders of this type are usually placed in anticipation of that the security price, having reached a certain level, will keep on increasing.


3. Sell Limit — an order to open SELL a position at a higher price than the price at the moment of placing the order. Orders of this type are usually placed in anticipation of that the security price, having increased to a certain level, will fall.


4. Sell Stop — an order to open SELL a position at a lower price than the price at the moment of placing the order. Orders of this type are usually placed in anticipation of that the security price, having reached a certain level, will keep on falling.

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