Entry orders

Let's go in DETAIL:

The different pairs of the foreign exchange market are part of the CFD category "CFD"

It is necessary to understand the cycle of a contract for difference.

CFD trading consists of two critical phases: the time of entry and time of exit.

- Entry : The exact moment in which we enter a trade: it may be buying or selling and there are different types of tickets that will be explained in later chapters.

-Exit :The price will have already moved, either in our favor or against us, our goal will be to close either with profits or losses. Forex is very different than stock we don’t have a portfolio of shares.

HOW TO UNDESTAND THE DIFFERENT TYPES OF ORDERS IN THE FOREX MARKET?

ENTRY ORDERS

ORDERS: MARKET EXECUTION

This entry type allows us to get into a trade in the exact moment of the current price of the asset chosen. They are the most used. The instant execution will allow you to enter the market in one click.

PENDING ORDER: LIMIT ORDERS

This entry order is excellent for those looking for a better price. Although it takes a little more experience in advance.

For example:

If we want to buy on the assumption that the market price is 1.50 and consider finding a better price, we will place a buy entry order below the current price at 1.40 (or whatever we want ). If the price reaches this price, the buy order will be executed.

If we want to sell, it works the other way.

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If we want to sell assuming the market price is 1.50 and consider finding a better price, we will place an entry order to sell above the current price of 1.60 (or what we want ). If the price reaches this price, the sell order will be executed.

You may find that this is a complex concept, especially if you just start knowing the trading, so I'll make things easier for you with a specific example:

EXAMPLE OF A BUY TRADE

Phase 1 : In the draw from above: Suppose we want to use an entry limit order for EURUSD quoted at 1.50.

We consider that the price is very high. We decided that it is better to wait for a better entry price.

Phase 2: The price has decided to drop a little, we place our buy limit order at a lower price than 1.50.

The price reached 1.40 and our order is activated.

Phase 3: We are in profit, the price continues its upward trajectory as we had expected.

EXAMPLE OF A SELL TRADE:

Phase 1 : in the draw from above: Suppose we want to use a limit order to sell EURUSD quoted at 1.50.

We consider that the price is very low. We decided that it is better to wait for a better entry price.

Phase 2: The price has decided to go a little higher, we placed our sell limit order at a higher price than 1.50.

The price reached 1.60 and our order is activated.

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Phase 3: we are in profit, the price continues its downward trajectory.

The great advantage of these order types is that they allow us to set and forget to monitor the price and being behind our screens all the time. However, we will need much more experience,and we do not know if the price will reach the desired price.

STOP ORDERS

This type of entry order allows us to access in the direction we think the price will move.

Example of buy stop:

Suppose we want to use a stop order for EURUSD trading at 1.50. We believe that the price will continue with its upward direction. And we put our buy order above the current price at 1.60. Once the price reaches this level, the order is activated.

Example of sell order:

Suppose we want to use an entry stop order for the same pair that is trading at 1.50. We believe that the price will continue with its downward direction. We place our sell order below the current price at 1.40. Once the price reaches this level, the order is activated.

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