The Forex Trading process starts with ordering. For those who think that this is a simple term should get acquainted with its types to be able to deal with the basic Forex strategies.
Market order leads to the investment in the form of buying or selling the currency at the specific time in the market. Here the main hint is to start trading at the given moment. The broker and the trader will not get the chance to choose the location of the trade, but the constant change of the spreads. This option is not a typical choice that a new trader should stop on, as it’s risky and might end up with a great loss.
As a good alternative there’s a limit order. This trading option allows choosing a specific price of the currency and you start trading as soon as the currency price reaches the expected point. This point needs to be calculated with the broker, so that to come up with a realistic expectation, as otherwise you might end up expecting forever. For this option the timing is not a factor. The most important thing about this option is that it allows getting the highest result with the least loss amount, though the limit point should be thoroughly thought.
Stop-loss order is quite similar with the limit order with its overall idea. Though here, instead of the desired price change of the trading currency, we have a desired expectation for the losses. Usually the trader draws where he wants to stop the trading. This option is mostly being used in conjunction with the first two ordering versions, as it just describes the stop of the trading and not the trading process as a whole.
As for the additional order types, there’s trailing-stop ordering. It changes the stop-loss point automatically based on the available data. It’s more of a software tool based, which makes it not that common strategy while trading.
And the final ordering type is take profit order. Most of the practiced traders choose the currency price at which they take the profit and stop trading. Not all of the brokers will agree to take this type of strategy in the regular basis, but it’s also not always the best choice as sometimes you cannot make a proper expectation about how high or low the price of the currency can reach.
