Type of Forex Orders – A Simple and Useful Guide

Do you want to know more about forex orders and how they work? Watch our latest video to find out how to profitably use forex contingent order in your everyday trading.

How to Profitably Use Forex Orders

When your trading financial instruments, they are massive amounts of order types available. However, there are only a handful of commonly used ones, and they break down into a couple of different categories. Initially, most traders will use what is known as an “instant execution order”. This is essentially telling the broker that you want to buy or sell a financial instrument immediately, and hopefully of the price that being offered when you press the button. However, this doesn’t necessarily protect you from slippage, meaning that we could have a fluctuation in price before your order actually gets executed. This normally isn’t a major issue, but it does appear from time to time.

The second group of orders or what is known as “pending orders.” This just means that certain conditions have to be matched in order for your order to fire off. When the most common pending order is a stop loss, protecting the trader from taking unbearable losses. In other words, when the trade goes against them, they are protected from compounding losses. There are other pending orders available, such as getting into a marketplace once a certain price is hit, and in a specific direction. You can also get a bit more complicated and demand a specific price or better, and many other variations of this, depending on your broker.

At the very least, you should be using stop loss orders, which of course are a type of pending order. As far as entering the markets, typically it is ok to just enter the markets with the instant order. However, during news announcements and other events, pending orders or at least ones that specify a price are best.