Type of Orders

Market Orders: A Market Order is an order that is given to a broker to buy or sell the currency at whatever the market is trading for at that moment. It can be an entry order into the market or an exit order to get out of the market. Traders use Market Orders when they are ready to make a commitment to enter or exit the market.           You must be very careful when using Market  Orders  in fast moving markets. In fast rallies or down reactions you can gain or lose many  points to slippage before you receive your fill.

Trading is an auction where there are buyers (bidders) and sellers (offerers). The bid is the "buy" and the "ask", or offer is the sell. Slippage is defined as: when a trade is executed  between a buyer and seller and the resulting buy or sell transaction is different than the price you saw just prior to order execution. With Market Orders you will lose on average one  to six pips, if not more, due to slippage.  Market Orders are rarely filled at the exact price you are expecting.  We Recommend caution when entering or exiting with a Market Order.

Limit Orders: Limit Orders are orders given to a broker to buy or sell currency lots at a certain price or better. The term Limit means exactly what it says. You will buy at that exact limit price or better a large majority of the time. Limit Orders are used to enter and exit the  market. They are generally used to acquire a specific price, avoiding slippage and unwanted order fills (execution price) which can happen with Market Orders.

When you sell above the market, it is a Limit Order. When you buy below the market, it is a Limit Order. A limit order will be executed when the market trades through it.  Seventy to ninety percent (70% to 90%) of the time, if the market is trading at your Limit Order it will be executed.  The market  must trade through you specified Limit Order number to guarantee  a fill. The computer will notify you within seconds of your fill. You do not have to call your broker to see if you have been filled.

Stop Orders: Stop Orders are orders placed to enter or exit the market at a desired specific price. When you buy above the market, it is a Stop Order. When you sell below the market, it is a Stop Order. Stop Orders turn into Market Orders when the market trades at that price. Stop Orders as well as Market Orders are subject to slippage, while Limit Orders are not.

The majority of Stop Orders are used as protective Stop Loss Orders. It is the order you  place with your entry order to insure an exit when the market goes against you. A good trader never trades without a protective Stop Loss Order. They are orders executed to get you out of the market when your trade has gone against you. 

One Cancels the Other (OCO): Whenever you enter the market, you must exit the market at  some future time. An OCO  order is  a procedure and means one-cancels-the-other. Once you have entered the market, you should place a protective Stop Loss Order and have in  mind a projected profit target. That projected profit target can be your Limit Order. If you simultaneously place both Limit and Stop Loss Orders when you enter the market, you can OCO them and walk away from your computer. What does that mean? At some future point in time  either  your  Stop  Order  or  Limit  Order  will  be  executed,  automatically canceling your opposing order. If the trader is so sure about the trade, he can execute an OCO order  and walk away from the trade. The computer will than manage the trade.

Cancel/Replace Orders: A Cancel/Replace Order is a procedure and not an entry or exit order. By definition it is when the trader cancels an existing open order and replaces it  replace it with a new order. A cancel/replace order is primarily a strategy of trading and is predominately used after one has taken a position in the market and wants to stay in the  market locking in profit.  For example: you buy Swiss at 1.410. Your protective Stop Loss Order is 1.390. The market  moves  in  you  direction  as  projected.