The decentralized Forex industry has already gained the momentum to be the largest exchange or share business of the world. Everything big possesses big issues. So does the Forex world. The market shows high volatility. The volatility is so high and risky that about 80% of the investors fail to cope with it and lose their capital. However, people join it in expectation to make a fortune and reorient the wheel of their luck.
Different Types of Forex Orders
Though there is no specific or demonstrated process to evade losses at trading, the maximum protection is termed as some orders. The successful traders relies on these orders as it allows an investor to save his money but also ensure the most optimal profit.
If you can’t resist the urge to know about these orders, read below to quench your urge.
Order 1 – The Stop-loss
Stop-loss orders refer to a system which helps a trader in Singapore set a tolerable loss point. He places this order with his chosen broker to set an exit point. The deal closes once the price reaches that point. These orders designed to limit the loss amount in a single trade. Setting this order is mandatory, and none can proceed forward without defining it.
Many investors find the option of no use and many others fear it. They don’t want to stop their trade merely because the market takes a reverse. To make sense out of stop loss, traders must think of it as an opportunity to lessen the risk. To know more about the stop loss, you can visit here. By exploring the premium articles at Saxo, you can easily boost your skills.
Order 2 – The Market-order
This is the order an investors issue for entering or exiting a business at the best possible price and at a particular time. Difference between price while setting the market order and the actual price can be observed in this highly volatile and the ever-changing Forex industry.
Therefore, a market order can only produce a multiple pip gain or loss. An investor must be strategic and notice an ideal business condition before defining the market order.
Order 3 – The Limit Order
A limit order refers to an order that is given only to execute a buy or sell. This transaction execution happens only at a given price. One can use this to purchase currencies at a below-market price and sell it at an above-market price.
The limit order prevents the risk of an instant price change. So, impregnable risk management should incorporate this order.
Order 4 – The Take Profit
This is an order that provides a broker with authority to close a business instantly and automatically. Of course, it happens if only the business reaches a particular predetermined point. Traders set this point fearing an unexpected reverse or a loss-ward turn. To avert such situations, you set a take-profit point to extract the profit before it turns into a bearish move.
A take-profit order is typically complementary to the stop-loss order. You may hear the term risk to reward ratio. It is nothing but the ratio of the take-profit pips amounts to the stop-loss pips amounts.
Order 5 – The Trailing Stop
It is the direct opposite order of the take-profit limit. It is also called as the profit-protecting order. It represents an authority that you give to your broker to sell or to purchase when the price takes an opposite direction.
The trailing stop limit is very similar to the stop-loss order. Among the differences they share, the most cardinal one is the mobile feature of the trailing stop order. It moves with the price to allow a trader to save his profit.
There is no doubt that Forex trading is highly risky business. However, the potential opportunity is so luring that people still choose this business as their profession. Once someone registers for the business, he has only two options. Either quit the career or learning from everything he encounters on his way forward. I hope this article’s lesson will be helpful to you.