Understanding the differences between the order types available can help you determine which orders best suit your needs and are best suited to help you to reach your trading goals. A market order is the most basic order type and is executed at the best available price at the time the order is received.
A limit order is an order to buy or sell at a specified price or better. A sell limit order is filled at the specified price or higher; buy limit orders are executed at the specified price or lower. Limit orders allow you the flexibility to be very precise in defining the entry or exit point of a trade. Keep in mind that limit orders do not guarantee that you will enter into or exit a position, because if the specified price is not met, you order will not be executed.
A stop order triggers a market order when a predefined rate is reached. A buy stop order triggers a market order when the offer price is met; a sell stop order triggers a market order when the bid price is met. Both stop orders are executed at the best available price, depending on available liquidity. Stop orders, also called stop loss orders, are a frequently used to limit downside risk.
Stop orders help to validate the direction of the market before entering into a trade. A trailing stop is a stop order that is set based on a predefined number of pips away from the current market price. A trailing stop will automatically trail your position as the market moves in your favor.
If the market moves against you by the predefined number of pips, then a market order is triggered and the stop order is executed at the next available rate depending on liquidity. Contingent orders combine several types of orders and are used to execute against a specific trading strategy. Contingent orders require that one of the orders is triggered, before the other order becomes activated. Unassociated orders are not attached to a trade and act independently of any position updates.
Remember, unassociated orders are not attached to a trade and act independently of any position updates. As with a regular OCO order, the execution of either one of the two "then" orders automatically cancels the other. Market orders are day orders as they are executed at the next available price. The range of order types available varies by our trading platforms.
Visit platform handbooks to learn more about the types of orders available to you. A demo account is intended to familiarize you with the tools and features of our trading platforms and to facilitate the testing of trading strategies in a risk-free environment. Results achieved on the demo account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the demo account.
Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment. Please let us know how you would like to proceed. Introduction to Order Types. Orders are critical tools for any type of trader and should always be considered when executing against a trading strategy.
Orders can be used to enter into a trade as well as, help protect profits and limit downside risk. Related Topics Trading Concepts What is a pip?
Understanding pips and their impact on a forex trade. Identify the effects of support and resistance have on financial charts. Discover the concepts of liquidity and volatility, and how they affect the forex market.More...