What Is an Order And How It Works

What Is an Order And How It Works

While an order is a request to buy or sell an asset, it is also used to control trading activity and manage risks. Therefore, the different types of orders as well as the object and features of each order are expected to be fully understood by traders. FX Orders are instructions sent to a broker or trading platform to execute a trade at a specific time or at a predetermined price. Certain types of base orders are Limit Orders, Stop Orders, Trailing Stop Orders and OCO Orders.

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Limit Order - Control of the price at which your trades are to be executed;

Looking to enter a position where you are comfortable? A limit order is an instruction to buy or sell an asset at a specified price that you specify to manage your gains or losses. With a limit order, you can open a position when an asset's price reaches a price predetermined by you. So this price control can be beneficial for you when entering or exiting a position because you are essentially identifying a specific price that could better serve your objectives.

• A buy-limit order will be executed only at the limit price or less.
• A limit order will only be performed at the limit price or at a higher price.
• Limit orders can be used along with stop orders to avoid significant downside losses.
• Limit orders can result in lost opportunities under rapidly changing market conditions.

Stop Order - Minimize Losses or Lock in Profits

Is managing your losses or profits top of mind? Then a stop order might help. A Stop Buy Order will be executed when the market reaches a specified price while a Stop Sell Order will be executed when the market goes down at a price specified by you. Therefore, proper management of a stop order when prices are up or down can help you manage your losses or profits more effectively.

• Stop-loss orders can be executed each time you have an open position to manage and minimize potential losses.
• Stop-entry orders may be used to enter the market in the direction in which the market is moving.
• You can move the stop-loss order toward the trade, using a trailing stop-loss to mitigate your losses or protect your gains.

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Trailing Stop Order - Eliminate the Necessity of Constantly Monitoring a Position

A trader may benefit from such an order by setting a certain percentage aside from the current price of an asset to support its profits when the market goes in his favour. It may also limit the risk as the market goes up or down. By setting a trailing stop order, the trader does not need to spend time constantly monitoring a position and manually adjusting a stop loss order.

• It’s the type of order designed to lock in profits or limit losses when a trade moves favourably.
• Trailing stops will move only if the price moves favourably and it will move to lock in a profit or reduce a loss.

OCO Order - Leveraging volatile market conditions

Are volatile markets your battleground? The OCO order allows you to gain more control over your position. An OCO order (also known as "One Cancels the Other") is a mixture of two in-progress orders that are placed on an asset simultaneously. Once an order is triggered, the other order is auto-cancelled. Therefore, you can limit your losses and determine your profit objectives. Defining additional multiple entry/exit points can allow you to handle multiple commands at the same time.

• This is a kind of conditional order for a pair of orders where the execution of one automatically nullifies the other.
• It is possible to place several conditional orders with other orders cancelled when one has been executed.

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Risk Warning: Contracts for Difference (‘CFDs’) are complex financial products, with speculative character, the trading of which involves significant risks of loss of capital.?

Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing investing advice or a recommendation, or an offer of or solicitation for any transactions in financial instruments or a guarantee or a prediction of future performance. Past performance is not a guarantee of or prediction of future performance.