Forex Currency Market Order is a request from a client or company that acts on its behalf to perform a trading transaction. There are two types of orders:
- A market order is an order to buy or sell an asset at the current price and time. The result of the execution of this order is a transaction concluded at the best (next) possible market price. Assets are bought at Ask price and sold at Bid price.
- A deferred order is a order to buy or sell an asset at a predetermined price in the future. Setting a pending order does not require opening a position at the moment, but rather when a certain price level is reached. Deferred orders are divided into two groups: Buy stop/Sell stop and Buy limit/Sell limit.
Buy limit – is an order to buy at a better (lower) price than the one that is currently available. The idea behind the order is that the trader hopes that the price of the asset will fall to a certain level (rollback) and then rise higher.
Sell limit – is a purchase order at a better (higher) price than the one currently available. The idea behind the order is that the trader hopes the asset’s price rises to a certain level and then drops.
Buy stop – is a order to buy an asset at a higher price than the one currently available. The Buy stop order is set at a price level that is higher than the current asset price and works when the level breaks higher, in anticipation of further price increases.
Sell stop – is a order to sell an asset at a lower price than the one currently available. The Sell stop order is set at a price level that is lower than the asset’s current price and works when the level breaks down, in anticipation of a further price drop.
Important types of Forex orders are orders that allow you to limit a potential loss or pick up a profit earned by a trader: Stop Loss and Take Profit.
Stop loss – is set at a higher (for sales transactions) or lower (for purchase transactions) price level than the order opening price to limit potential loss. When the price reaches the Stop loss level, the position will be automatically closed with the loss initially defined in the Stop Loss order.
Take Profit – is set at a higher (for purchase transactions) or lower (for sales transactions) price level than the price of opening a order for potential profit. When the price reaches the Take Profit level, the position is automatically closed by the profit initially determined in the Take Profit order.