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Thread: 9 Common Forex Trading Orders - Use them To Protect Profit And Prevent Loss

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    Default 9 Common Forex Trading Orders - Use them To Protect Profit And Prevent Loss

    When trading forex, there are several order types that the retail trader can place in the market place to protect themselves from adverse market conditions and to capitalize on opportunities that the market often provide. We will start with the basic orders that should be available in any trading platform. For beginners, you should keep to the simple types until you get comfortable with your trading platform. Never force yourself to take any trade for the sake of playing with order types.

    It can be said that all orders in the market place boils down to Buy or Sell orders. Remember that when trading currency pairs you are selling one currency and simultaneously buying another. Here are some of the common order types:

    (1) Buy Order - Place this order when you anticipate that the market will rise. Often, you have to provide some parameters with your buy order. For instance, do you want to buy the currency pair at the price it is currently trading at, or do you have a particular price in mind? What if your order cannot be filled at the price you are specifying, what price range is comfortable to you? This is called slippage. For example, the GBP/USD is trading at 2.0190 and you anticipate that it will go up higher; you can place a buy order to buy at 2.0190. However, there is no guarantee that you will get in at that price, many brokers will require that you specify a slippage. Continuing with our example, suppose, you are comfortable buying as low as 2.0185 or at most at 2.0195, then you would specify a slippage of 5 pips. This is for your protection. Suppose just before your order becomes active, their is a news event, that makes GBP/USD to drop down 50 pips, are you still willing to buy? - maybe the trend has now changed downwards, your answer may be no. In addition, you must specify the time range when the order will be active. Your buy entry price should be dictated by your trading strategy or system.

    (2) Sell Order - Place this order when you anticipate that the market will fall. Sell order have the same kinds of parameters we discussed under Buy Order.

    (3) Market Order - You want to get in or out of the market at the current prevailing price. Execution is typically guaranteed, but price is not. A market order ensures that you will get into or out of the market.

    (4) Limit Order - An instruction to execute an order if a market moves to a more favorable level (i.e. an instruction to buy if a market goes down to a specified level or to sell if a market goes up to a specified level. Execution is typically not guaranteed. Your broker will use their "best efforts" to get your order filled. This order can be used to enter or exit a position.

    (5) Stop Order - An instruction to execute an order if a market moves to a less favorable level (i.e. an instruction to buy if a market goes down to a specified level, or to sell if a market goes up to a specified level. A Stop Order is often placed to put a cap on the potential loss on an existing position; which is why Stop Orders are sometimes called Stop-loss Orders. Never trade without placing a Stop-loss order. A trade you think has all the right ingredient for success may turn into a fat loss right before your eyes. Always protect yourself so that you can be alive to trade another day.

    (6) Trailing Stop Order - A trailing stop order is similar to Stop Loss order. The only difference is that you are already in profit and you want to protect your profit. Trailing Stop Order then allows you to configure your stop order to continue to follow the price movement in real-time by specifying the distance in pips you would like your stop to move. For example, you have a long USD/JPY position, which you bought at 111.50 and you set a Stop Order to sell USD/JPY at 111.10, in case USD/JPY starts to fall. This Stop Order will close your position with a 40-pip loss if USD/JPY drops to 111.10. However, suppose USD/JPY moved up to

    111.90. You can move your Stop Order to sell at 111.70 which will luck in a profit of 20 pips for you in case USD/JPY were to stop its upward movement.

    (7) Good till Canceled Order (GTC) - As mentioned earlier, when you place an Order, you must specify for how long the Order is to be valid. The GTC Order is a very common type of Order; it remains valid, 24 hours a day, until you cancel it, or it is executed. It is the trader's responsibility, not the dealers, to remember there is an open order.

    (8) Day Orders - Day Orders are good until 23:00 CET time.

    (9) Order Cancels Order (OCO) - Also known as One Cancels Other. After entering the market, a limit order to protect profits, and a stop-loss order to limit losses can be placed. When either the limit or the stop order is executed, it will cancel the other order automatically. For example, you sold EUR/USD at 1.2290, looking for a short-term move to 1.2260. However you decide that if EUR/USD moves above 1.2310 you want to cut your loss, therefore you put on a Limit Order to buy EUR/USD at 1.2260, and a Stop Order to buy EUR/USD at 1.2310 on an OCO basis. This order will close your position with a 30-pip profit if Limit Order is reached first or with a 20-pip loss if Stop Order is reached first. Once one of the orders is executed, the second order is automatically cancelled.

    There are other types of Orders available to traders. However, keeping your trading simple is perhaps one of the best secrets of success in forex trading. Making money is what matters, not how complex your order structure is. A rule of thumb is that if you do not understand what the order you are placing really mean, do not place it. It can hurt you really badly.
    byr. Sunmonu
    forextradingweekly.com

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    I only can use 4 orders in MT4
    How can I use the others in MT4?

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    I think you have to use a script.
    Search the web for the script.
    But I never use any script

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    Quote Originally Posted by SwingForex View Post
    I only can use 4 orders in MT4
    How can I use the others in MT4?
    u can make many orders in mt4 its not restricted to only one currency pair ...

    but if u stick to a pair so u can make more profit
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    Till u site have FXOPEN banner u can add u site. 2nd time warning.
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    Quote Originally Posted by fxsika789 View Post
    When trading forex, there are several order types that the retail trader can place in the market place to protect themselves from adverse market conditions and to capitalize on opportunities that the market often provide. We will start with the basic orders that should be available in any trading platform. For beginners, you should keep to the simple types until you get comfortable with your trading platform. Never force yourself to take any trade for the sake of playing with order types.

    It can be said that all orders in the market place boils down to Buy or Sell orders. Remember that when trading currency pairs you are selling one currency and simultaneously buying another. Here are some of the common order types:

    (1) Buy Order - Place this order when you anticipate that the market will rise. Often, you have to provide some parameters with your buy order. For instance, do you want to buy the currency pair at the price it is currently trading at, or do you have a particular price in mind? What if your order cannot be filled at the price you are specifying, what price range is comfortable to you? This is called slippage. For example, the GBP/USD is trading at 2.0190 and you anticipate that it will go up higher; you can place a buy order to buy at 2.0190. However, there is no guarantee that you will get in at that price, many brokers will require that you specify a slippage. Continuing with our example, suppose, you are comfortable buying as low as 2.0185 or at most at 2.0195, then you would specify a slippage of 5 pips. This is for your protection. Suppose just before your order becomes active, their is a news event, that makes GBP/USD to drop down 50 pips, are you still willing to buy? - maybe the trend has now changed downwards, your answer may be no. In addition, you must specify the time range when the order will be active. Your buy entry price should be dictated by your trading strategy or system.

    (2) Sell Order - Place this order when you anticipate that the market will fall. Sell order have the same kinds of parameters we discussed under Buy Order.

    (3) Market Order - You want to get in or out of the market at the current prevailing price. Execution is typically guaranteed, but price is not. A market order ensures that you will get into or out of the market.

    (4) Limit Order - An instruction to execute an order if a market moves to a more favorable level (i.e. an instruction to buy if a market goes down to a specified level or to sell if a market goes up to a specified level. Execution is typically not guaranteed. Your broker will use their "best efforts" to get your order filled. This order can be used to enter or exit a position.

    (5) Stop Order - An instruction to execute an order if a market moves to a less favorable level (i.e. an instruction to buy if a market goes down to a specified level, or to sell if a market goes up to a specified level. A Stop Order is often placed to put a cap on the potential loss on an existing position; which is why Stop Orders are sometimes called Stop-loss Orders. Never trade without placing a Stop-loss order. A trade you think has all the right ingredient for success may turn into a fat loss right before your eyes. Always protect yourself so that you can be alive to trade another day.

    (6) Trailing Stop Order - A trailing stop order is similar to Stop Loss order. The only difference is that you are already in profit and you want to protect your profit. Trailing Stop Order then allows you to configure your stop order to continue to follow the price movement in real-time by specifying the distance in pips you would like your stop to move. For example, you have a long USD/JPY position, which you bought at 111.50 and you set a Stop Order to sell USD/JPY at 111.10, in case USD/JPY starts to fall. This Stop Order will close your position with a 40-pip loss if USD/JPY drops to 111.10. However, suppose USD/JPY moved up to

    111.90. You can move your Stop Order to sell at 111.70 which will luck in a profit of 20 pips for you in case USD/JPY were to stop its upward movement.

    (7) Good till Canceled Order (GTC) - As mentioned earlier, when you place an Order, you must specify for how long the Order is to be valid. The GTC Order is a very common type of Order; it remains valid, 24 hours a day, until you cancel it, or it is executed. It is the trader's responsibility, not the dealers, to remember there is an open order.

    (8) Day Orders - Day Orders are good until 23:00 CET time.

    (9) Order Cancels Order (OCO) - Also known as One Cancels Other. After entering the market, a limit order to protect profits, and a stop-loss order to limit losses can be placed. When either the limit or the stop order is executed, it will cancel the other order automatically. For example, you sold EUR/USD at 1.2290, looking for a short-term move to 1.2260. However you decide that if EUR/USD moves above 1.2310 you want to cut your loss, therefore you put on a Limit Order to buy EUR/USD at 1.2260, and a Stop Order to buy EUR/USD at 1.2310 on an OCO basis. This order will close your position with a 30-pip profit if Limit Order is reached first or with a 20-pip loss if Stop Order is reached first. Once one of the orders is executed, the second order is automatically cancelled.

    There are other types of Orders available to traders. However, keeping your trading simple is perhaps one of the best secrets of success in forex trading. Making money is what matters, not how complex your order structure is. A rule of thumb is that if you do not understand what the order you are placing really mean, do not place it. It can hurt you really badly.
    byr. Sunmonu
    forextradingweekly.com

    Good article For newbies on MT4

    " Order Cancels Order (OCO) "
    is Quiet New For me "Once one of the orders is executed, the second order is automatically cancelled. "
    sorry for my bad english

  6. #6
    seahawks90
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    Default

    Quote Originally Posted by soumyakhatri View Post
    u can make many orders in mt4 its not restricted to only one currency pair ...

    but if u stick to a pair so u can make more profit
    its true that keep sticking with one pair is good for the traders but its also recommended that you must have to do the trade with various pairs like eur/usd and gbp/usd which is most common pair in forex trading. Sometime this thing minimize the size of risk.

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    Default OCO and GTC orders

    where can i see option for OCO and GTC in metatrader4 terminal ? I see only instant orders also known as market orders and ending orders with sl and tp orders set on it. we can use trailing stop but minimum is 15. I dont see OCO and GTC orders. OCO is really much helpful order while news trading as it cancels the other pending order when one is filled.

  8. #8
    seahawks90
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    Default

    @parwin i must say that i agree with your last line statement which you have described about the news, we all know that news plays an important role.

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