Financial Trading Solutions

Types of orders in the Forex market.

The order or the demand we will name the instructions given to the dealer on carrying out of operation (purchase and sale of one currency for another).

As a whole on Forex exists two types of orders:
1. Warrants on the market.

It is orders to buy or sell one currency for another for a current market price.
These warrants are subdivided into two types depending on the one who offers the quotation for the transaction the first and who agrees on a suggested price:

1.1. Market order. The trader, seeing on the quotation screen, suggests the dealer to conclude the bargain under the given price. The dealer either agrees, or offers the trader other price. If he agrees, the transaction consists automatically.
Thus, the trader offers, and the dealer agrees on a suggested price.

1.2. Warrants of type Quote (inquiry of the double quotation). The trader requests of the dealer simultaneously two quotations on purchase and on sale (Ask and Bid). The dealer offers simultaneously two quotations, and the trader or agrees one of them (and corresponding operation of purchase and sale), or refuses from transaction fulfillment.
Thus, at the warrant of type Quote on the contrary the dealer offers, and the trader agrees on a suggested price.

2. The postponed warrants.
The postponed warrants are orders to the dealer to make certain operation on behalf of the client under the stipulated price (which now are not present) when the market will reach it. After setting of such demand it is not obligatory to trader to watch the market. The dealer himself will execute the transaction when the market will reach level specified in the demand.
In relation to a way of exhibiting the postponed warrants share on:
2.1. Not adhered to a position (GTC).
1. GTC.
Warrants GTC (Good Till Canceled) are orders to the dealer on purchase or sale for a determined price with certain volume. They can, both to open a new position (transaction) and to close the existing transaction (depending on already open transactions). So if at the trader is opened the position on purchase on certain currency pair in case of execution GTC of the warrant on sale on the same currency pair the open position will be closed in full or in part (depending on volume GTC of the warrant). If volume GTC of the warrant is equal to already opened position it will be closed entirely if less – it will be closed partially, more – will be closed completely and the position in an opposite direction will open.

2.2. The warrants adhered to a certain position
These are the warrants closing under those or other conditions a certain position (transaction) and accordingly adhered to given concrete transaction. If the transaction is closed not on such type of warrants all warrants adhered to it are cancelled as the position disappears.

There are 2 types of such warrants:
2.2.1. Stop-loss.
Stop-loss – in classical sense is an order to the dealer to close a position if the price reaches certain value and the loss on a position will reach certain volume. It is used in time to leave the market at adverse development of a situation and to fix the loss before it becomes big.
2.2.2. Take-profit.
Take-profit – in classical sense is an order to the dealer to close a position if the price reaches certain value and profit on a position will reach certain volume. It is used in time to fix profit while the market was not developed in the adverse side.

It is important to gather as much information about Forex as possible. Because this info will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be rock solid guarantee against losses, especially on Forex, but sometimes even one Forex book can be of big service to you.