Order types and trades’ conditional orders in the Forex market

Trading in the forex market is done in two ways: Aggressive or Market Order and Pending Order.

If you are looking for a complete educational article on the types of orders and trades in the forex market, this article is for you. Whether you're a beginner or a professional trader, you must understand order types and trades in the financial and forex markets. In this article, we will review conditional trades or pending orders and aggressive trades. Stay tuned.

Contents

Various ways to enter a trade

In the financial markets, there are two general methods for entering into a trade:

• Aggressive trades or market order
• Pending Orders

We will examine each method further in this educational article from Trendo International Broker.

Aggressive trades or market order

In the first method, you aggressively open or close your position and execute your orders in the market by pressing the Sell, Buy, or Close buttons through your trading platform. A market order is an instruction executed instantly to buy or sell a symbol at the current market price.

How to register a market order

In this method, after analyzing the desired trading symbol, for example, you decide to enter a Buy trade at this price and this moment. Therefore, in the desired chart, click on the name of the symbol at the beginning, so that the trading panel or so-called One Click Trading box will open for you, which is a purple rectangle in the following example from the Trendo platform.

After opening the One Click Trading box, specify your trading volume and enter the buy trade with just one click on the Buy icon. Fast & easy!

Tips on executing a trade with the market order method

• This method is the simplest type of trade execution usually used by most traders.
• This type of trade is executed quickly and guarantees a quick entry or exit from a position.
• Trades in this method are executed at the current market price.
• The execution of trades in this method also depends a little on the users' internet speed, and there is a possibility of a difference in the entry point at low speeds.
• Short-term traders, especially scalpers, use this method because the speed of trade execution is decisive in these techniques.

Pending Orders

In this method, you intend to trade at a price different from the current market price. That is why you can place your order (pending order) at the desired price, wait for the market to reach it, and then execute the trade. These types of orders are split into the following 4 methods:

• Sell Limit order
• Buy Limit order
• Sell Stop order
• Buy Stop order

How to register conditional trades

Before looking at any of these, we must learn how to register conditional trades. To do this, through the Trendo platform, first click on the (+) icon, and after the order window opens, click on Market Execution. You can see the mentioned steps in the image below.

Similar to the image below, after clicking on Market Execution, you will see 5 options, the first 4 of which are related to the types of trade orders. You can select any of them, and after writing the desired price in the Price box, click on the Place option to place your order.

The last option, Alert, is related to when you intend to set an alarm at a specific price (higher or lower than the current price), and after the market reaches that price, the Trendo platform will notify you of the desired price with a notification.

The four types of pending orders in the Trendo Broker trading platform are:

1. Sell Limit order

Definition: A sell limit order is used when you intend to sell at a price higher than the current market price.

Example: Similar to the image below, the GBPUSD currency pair is trading at 1.26567, and you expect the market to decline from 1.26998. For this reason, place a pending Sell Limit order at the 1.26998 price.

2. Buy Limit order

Definition: A buy Limit order is used when you intend to buy at a price lower than the current market price.

Example: Similar to the image below, the EURUSD currency pair is trading at 1.08394, and you expect the market to go up from 1.08100. For this reason, you place a pending buy limit order at the 1.08100 price.

Read More: Full Review of Euro to Dollar (EURUSD)

3. Sell Stop order

Definition: Sell Stop order is used when you intend to sell at a price lower than the current market price.

Example: Similar to the image below, USDJPY is trading at 149.83, and you expect the market to be bearish after reaching 149.50. For this reason, you place a pending Sell Stop order at the 149.50 price.

4. Buy Stop order

Definition: A buy-stop order is used when you intend to make a buy trade at a price higher than the current market price.

Example: Similar to the image below, the gold symbol (XAUUSD) is trading at 2047.50, and you expect the market to be bullish after reaching 2053. For this reason, you place a pending buy-stop order at the 2053 price.

Read More: Factors affecting the global gold price (XAUUSD)

Take profit and Stop loss

Another type of conditional orders or pending orders are Take profit and Stop loss orders, which are necessary for risk management and profit and loss control. For a complete understanding of the take profit and stop loss, refer to the following article:

Summary

In this article, we discussed the types of orders and the trade execution method in the forex market, a concept essential for successful trading in the forex market. Market orders are executed immediately at the current market price, while conditional orders allow traders to set their entry and exit points based on a specific price. You can increase your chances of success in trading by using these methods correctly with proper risk management, provided you constantly learn and practice.