Types of orders on the Forex market

Forex market orders

Orders on the Forex market is a currency exchange market which is the largest and most growing element of the global financial market. The daily turnover is close to USD 4 trillion, which is 30 times the trading volume of all stock markets in the USA.

Transactions in various foreign exchange markets (from Asia to the USA)

The currency market is not physically located. All Forex activities are based on electronic and telephone networks connecting banks, businesses and individual customers. Currency trading takes place 24 hours a day from Monday morning in Asia until the closing of trade in New York on Friday.

The activity of different investor groups is shifting in line with time zones and transactions in global financial centres such as Sydney, Tokyo, London and New York. As investors from different parts of the world become active on the Forex market, the liquidity of currencies related to these regions is also increasing.

In order to enter the currency market, an investor must make an instruction to open a Forex account, then download a special trading platform and then have the opportunity to participate in this vast part of the world’s financial markets. Beginners on the foreign exchange market who do not want to bear risk at the outset can take advantage of the so-called „free market risk”. a demo platform, which is also directly linked to the currency market.

However, it is powered by virtual cash, which allows you to test the platform itself as well as trading systems, which will then be used on your real account.

Types of orders on the Forex market

Limit orders allow you to open a position automatically based on a defined value of a currency pair. If a long position is taken, the transaction will be executed at a price not higher than the limit specified in the order. In the case of an order opening a short position, the transaction will be executed at a price not lower than the defined limit. A limit order may be used both to open and close positions.

Take profit orders are used to close a profit position. For example, when playing the EUR/USD price increase of 1.3125 with a set take-profit order of 25 pips above the buy price, the order will be automatically executed when the price reaches 1.3150. in case of a long position, the take-profit position is set above the trade price, and in case of a short position the order is set below the price of the transaction opening the position.

Stop-loss orders should be an integral part of investment strategies in the foreign exchange market as they limit losses on open positions. When a stop-loss order is activated, the price limit, which limits the loss, is always placed opposite to profit orders.

Trailing stop orders are one of the most interesting types of orders on the Forex market, which constitute a modification of stop-loss orders. Used when the foreign exchange position is maintained in a favourable fluctuation field. Trailing stop order will follow a positive position direction, and in case of a reversal of the trend and unfavourable change in your currency pair, a trailing stop order will automatically close your position.