Types of Forex Trading Orders

Entry Orders: Orders to Open Positions

You can use Entry Orders to open new positions in the future when prices reach a specific level pre-determined by you, at which you would like to buy or sell. This means that should you spot a trading opportunity, be it in current or future market levels, there is always the possibility of maximising your trading potential. 

There are two types of Entry Orders:  

Stop Orders

Stop Orders can be used when you believe the price will continue in the same direction after a certain point. For buy orders, this would be for order levels above the current price whilst sell orders would be below the current price. 

For example, let's say that USD/CHF is currently trading at 0.8030/0.8033. 

You believe that if USD/CHF goes up to 0.8060, then it is likely to rise further. Therefore, you want to enter a Buy position when the price hits this resistance level rather than trade at the current price. 

You place an Entry Stop Order to buy $10,000 on USD/CHF when the price reaches 0.8060. This means that when the USD/CHF 'ask' price reaches 0.8063, the order will be executed. You will be automatically entered into a new Buy position of $10,000 on USD/CHF. 

Limit Orders

You can use an Entry Limit Order when you believe that the price will reverse after a certain point. For buy orders, this would be below the current price whilst sell orders would be above the current price. 

For example, let's say the AUD/USD is currently trading at 1.0937 / 1.0939. 

You believe that if AUD/USD reaches 1.0965, the Australian dollar will fall in value against the US dollar. Therefore, you want to enter a Sell position when the price hits this level rather than trade at the current price. 

You place a Limit Entry Order to sell AUD10,000 on AUD/USD when the price reaches 1.0965. Therefore, when the ‘bid’ of AUD/USD hits 1.0965, the order will be triggered. A new Sell trade of AUD10,000 on AUD/USD will be opened automatically.