Orders in Forex market

There are many kinds of orders which traders can place to transact in the Forex market, for
making profit out of it.
1-Market Order
The market order is the most simple and common kind or order. Here, the trader buys
and sells the currency at the rate prevailing in the market at the time of placing the order.
Due to the huge size of the market and the high volatility, trends can reverse any instant,
so people prefer placing orders at the market price to guard themselves against any
adverse trend.
2-Limit order
In this case, the trader specifies a price at which he may wish to buy or sell the currency.
Suppose a trader has bought EUR against the USD at 1.9810, then he can place a sell
order at 1.9825, when the exchange will execute the order and he will profit from it. The
order will get cancelled if the target price is not achieved during the day.
3-Stop loss order
Due to the volatility, stop losses are essential. They determine the maximum loss a trader
is willing to suffer. Suppose in the above instance, the risk-taking ability of the trader is
low, then he may place a stop loss at 1.9805, at which level the exchange will book
losses for him, and he won’t be affected by any fall below 1.9805.
4-Entry order
Such an order is filled only when certain conditions are met in the market, which the order
specifies. The entry order can be a limit entry order or stop entry order.
- Limit entry order
As an example, let’s assume that the current market price for EUR/USD is 1.9805-10.
This implies that the trader can transact at these levels. Here, a trader can put a limit
entry order to sell his holdings at a price more than the market price, say, 1.9815. His
order would be executed only if that price is attained. In the similar manner, he can place
an order for buying at a level of, say 1.9800, and his ‘buy’ order would remain pending till
the price falls to that level.
- Stop entry order
Such an order is generally used when the trader has sufficient grounds to believe that the
currency is trading in a fixed range and believes that it is on the verge of a breakout from that range.