Types of Forex Orders

When a Trader places an order to buy or sell a currency, there are two fundamental execution options: place the order “at market” or “at limit.” Market orders are transactions meant to execute as quickly as possible at the present or market price. Conversely, a limit order sets the maximum or minimum price at which you are willing to buy or sell.

There only two types of order execution in forex platform:

  • Market orders
  • Limit orders

 

Market orders – Guarantee the execution but not guaranteed the price

Limit orders – Guarantee the price but not guaranteed the execution

                                                 Market Order Types:

  • Buy at Market Price
  • Sell at Market Price

In the market you can see two price Ask price and Bid Price. For example, the Bid price for USD/JPY is currently at 112.40 and the ask price is at 112.42. Either you can Buy or Sell at the current market price

BUY at Market Price: If you preferred to buy then your buy price placed at 112.42

SELL at Market Price: If you preferred to sell then your sell price place at 112.40

 

                                                  Limit Order Types:

A limit entry is an order placed to either buy below the market or sell above the market at a certain price.

  • Buy Limit : Buy below the Current Market Price
  • Buy Stop : Buy above the Current Market Price
  • Sell Limit : Sell above the Current Market Price
  • Sell Stop : Sell below the Current Market Price

 

Example: USD/JPY Current Market Price Bid Price 112.40, Ask Price 112.42

 

Buy Limit: You can place a pending order below the current market price. Buy Limit order placed at 112.25, if the ask price comes 112.25 then your order will execute. After the execution that means you have bought USD/JPY @ 112.25

Buy Stop: You can place a pending order above the current market price. Buy Stop order placed at 112.75, if the ask price comes to 112.75 then you order will execute. After the execution that means you have bought USD/JPY @ 112.75

Sell Limit: You can place a pending order above the current market price. Sell Limit order placed at 113.25, if the bid price comes 113.25 then your order will execute. After the execution that means you have sold USD/JPY @ 113.25

Sell Stop: You can place a pending order below the current market price. Sell Limit order placed at 110.25, if the bid price comes 110.25 then your order will execute. After the execution that means you have sold USD/JPY @ 110.25

 

There is one more order type in Forex Market same like market execution: Its called  Instant Order Execution.

Instant Order Type: Instant order is same as Market order specification with slight difference as “guarantee the execution and also guaranteed the price” Instant execution is a type of execution when a client is placing an order and specifies both volume and price, and the order should be processed instantly. If the price changes at that moment, a forex broker cannot change the execution price. This execution type is usually used by market maker brokers.

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