| Market orders |
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| Wednesday, 17 September 2008 18:32 |
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Market orders simply refer to how you enter or exit a trade. There are several types of orders that exist in the forex market because different brokers accept different types. The first type of order in the forex market is called the limit order. This type of order is an order played to buy or sell at a certain price. Two variables are involved with this type of order: price and duration, meaning you specify the price at which you want to buy or sell a currency pair and then how long you want the order to remain active. A market order is the order in which you buy or sell at the current market price. A stop-loss order is a limit order linked to an open trade to prevent additional loses if price goes against you. This type of order will remain until your position is liquidated unless you can cancel the order. Some of the more obscure sounding orders consist of the GTC (good ‘til canceled) order. This order will remain active until you cancel it. Your broker will not cancel the order so it is important to remember that you have the order. A GFD, good for the day, order will remain active until the end of the day. The end of the day refers to when the U.S. market closes (5pm EST). The last is the OCO, or order cancels other, order. This is a combination of the two limit and stop-loss orders. Two orders that have price and duration variables will be placed above and below the current price. When on order is executed the other order will be canceled. |