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Order Types

A guide for different Order Type

The term “Order” refers to how you will enter or exit a trade. There are many different types of orders that can be placed in the market. You can choose to execute a trade at the current market price. Alternatively, you can create a conditional order to execute a trade at a future market price, above or below the current market rate. Read about the order types available on MetaTRader 4

Market Order

This is practically the most common order type used by traders. A market order is an order to buy or sell a financial asset at the current price. When executed, it results into an open position in the market. Money Ocean FX executes market orders in real-time.

Pending Orders

There are hundreds of currencies in the world, and each has a three letter symbol. American Dollars are USD, Euros are EUR, Swiss Francs are CHF, British Pounds are GBP and onwards to all the currencies.

Unlike market orders, pending orders are an instruction to buy or sell a financial asset at a specified price in the future. A broker executes the said order when the set price objectives are achieved. Examples of pending orders are:

 

Limit Order

Limit orders are used when traders expect a better price than the current one. A buy limit is a pending order to buy an asset at a lower price than the current one, whereas a sell limit is a pending order to sell an asset at a higher price than the current one.

 

Stop Order

Stop orders are used to buy or sell an asset when the price reaches a specific level. When the price stop level is reached, it becomes a market order and is executed. A buy stop is a pending order to buy an asset at a price higher than the current one, whereas a sell stop is a pending order to sell an asset at a price lower than the current one.

One Cancels the Other Order (OCO)

One Cancels the Other Orders (OCOs) are conditional orders that combine two entry orders. OCOs stipulate that when one order is triggered, the other order is cancelled automatically. This type of order aids risk management and it is an effective trading strategy, because when a particular trade idea is wrong, the opposite suggestion is usually right.

Take Profit and Stop Loss Orders

These orders are for exiting a trade position at a predetermined price point. Take Profit orders are designed for booking profits on a trade position when a certain price is achieved, while Stop Loss orders are intended for minimising losses at a defined price point when the asset price moves in an unprofitable direction. Take Profit and Stop Loss orders are attached on both market orders and pending orders.

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