Order type

Order type

Understanding the differences between the available order types can help traders determine which orders better meet the needs of traders,so as to select the appropriate order types to help traders achieve their trading objectives.

Basic order type

A、market order

    Market order refers to the execution of the order at the current market price.In other words,when a trader places a market order,it means that the foreign exchange broker is allowed to buy or sell for the trader at any current market price.
    Even if the trader places a market price order,the price at which the transaction is actually executed may be different from the price quoted by the trader before.The specific reasons can be found in the article "What is a slip point?How does it happen?Can it be avoided?" of Datahui Finance.Some trading platforms will allow traders to limit the maximum sliding point.If the market fluctuation has exceeded the set value,the order will be automatically cancelled;There are also some platforms that allow the setting of sliding point restrictions,but do not implement these restrictions in actual operation.

    For example,the buying price of EUR/USD is 1.0745 and the selling price is 1.0746.If you want to buy euro/dollar in the market,you can buy it at 1.0746.

    The biggest advantage of the market price order is that it is almost completed instantaneously,so the order is guaranteed to be executed in foreign exchange transactions.

B、Limit and Stop Order Limit Order

    It refers to an order that is bought and sold at a specified price or a better price.That is,when the market is at or below a certain price,set the purchase order;Set the sales order when the market is at or above a certain price.

    For example,the current quotation of EUR/USD is 1.0745/1.0746.Traders can set a Buy Limit Order or Sell Limit Order.If traders want to sell their existing positions when the price reaches 1.0760,they can set the selling price to 1.0760.If a trader wants to build a position when the price reaches 1.0730,he can set the buying price to 1.0730.

    The limit order allows traders to flexibly define the entry point and exit point of the transaction,but it should be noted that the limit order does not guarantee the traders to build and close positions,because if the specified price conditions are not met,the traders' orders will not be executed.

    For example,traders intend to buy EUR/USD at 1.0745 and set a 30-point tracking stop.This means that at the beginning, the traders' stop loss level was 1.0715.If the price fell to 1.0730,the stop loss level would become 1.0700.

    As long as the price changes in the same direction as the traders' judgment, or even if the direction is opposite to the traders' judgment, but does not reach 30 points, the order will always be valid. If the price reaches the tracking stop loss position on a day, the stop loss order will be automatically triggered, and then the position will be automatically closed.

    There are six types of registration on MT5:

1、Buy Limit

    For the purchase transaction request,when the market price is equal to or less than the specified price of the order,please note that the current market price must be higher than the order price.

    Usually,such orders are expected to fall to a certain price and then rise.

    Example:Assume that the current market purchase price AUDUSD=0.74302.We predict that it will fall to 0.74002 and then rise.We submit a purchase limit order with a price of 0.74002 at 0.74302.If the transaction price of AUDUSD drops to 0.74002 at this time,the purchase limit order will be automatically closed.

2、Buy Stop

    A transaction request to buy when the market price is equal to or greater than the specified price in the order.It should be noted that the current market price is lower than the order price.

    Usually,this order is expected to reach a certain price and then continue to rise.

    Example:Assuming that the current buying price of AUDUSD=0.74302 in the market,we predict that if it can rise to 0.74602, it will continue to rise.We submit a buying limit order with a price of 0.74602 at 0.74302.If the transaction price of AUDUSD rises 0.74602 at this time,the buying limit order will be automatically closed.

3、Sell Limit

    Sell the transaction request when the market price is equal to or greater than the specified price in the order.Please note that the current market price is lower than the order price.

    Usually,this order is expected to rise to a certain price and then fall back.

    Example:Assume that AUDUSD=0.74302 is sold in the current market,and we predict that it will fall if it can rise to 0.74602.We submit a sell limit order with a price of 0.74602 at 0.74302.If the transaction price of AUDUSD rises by 0.74602 at this time,the buy limit order will be automatically closed.

4、Sell Stop

    Sell the transaction request when the market price is equal to or less than the specified price in the order.Please note that the current market price is higher than the order price.

    Usually,this order is expected to continue to fall if the market price falls to a certain level.

    Example:Assume that AUDUSD=0.74302 is sold in the current market,and we predict that it will continue to fall if it can fall to 0.74002.We submit a sell limit order with a price of 0.74002 at 0.74302.If the transaction price of AUDUSD rises by 0.74002 at this time,the sell limit order will be automatically closed.

5、Buy Stop Limit

     This type combines the first two types.It is predicted that if the market price rises to the first specified price,it will fall,but at the same time it will rise when it falls to the second specified price.

    It is to use the break order to place the buy order.When the future market price reaches the breakout price (price field) indicated by the order,a back-stepping purchase order will be placed at the price specified in the order breakout back-stepping field.The set breakout price is higher than the current purchase price,while the set back-step selling price is lower than the breakout price.

    Example:Assuming the current market purchase price AUDUSD=0.74308,we predict that if it can rise to 0.74313,it will fall,but if it falls to 0.74309, it will rise.Then set a registration form;If the price level reaches 0.74313,a listing will be activated,and if the daily price level reaches 0.74309,a purchase will be made.

6、Stop Order

    The stop loss order is triggered in case of loss and is mainly used for stop loss.Generally,the purchase order is set above the market price or the sale order is set below the market price.

    Example:The quotation of EUR/USD before the month is 1.0745/1.0746.A trader can set a Buy Stop Order or a Sell Stop Order.For example,a trader can set a buy price of 1.0760 and a sell price of 1.0730.

C、Trailing Stop Order

    Tracking stop loss can also be called moving stop loss,which tracks the price change direction beneficial to traders and maintains the initial price difference between the stop loss price and the current price.It follows the latest price and sets a certain number of stop losses.As long as the price fluctuates in the direction of profit,the order is always valid.If the price reverses to a certain extent,the stop loss will be triggered and closed.Tracking the stop loss is a very good trading tool,especially in the case of large price fluctuations,which can ensure profits.

    For example,traders intend to buy EUR/USD at 1.0745 and set a 30-point tracking stop.This means that at the beginning,the traders' stop loss level was 1.0715.If the price fell to 1.0730,the stop loss level would become 1.0700.

    As long as the price changes in the same direction as the traders' judgment,or even if the direction is opposite to the traders' judgment,but does not reach 30 points,the order will always be valid.Once the price reaches the tracking stop loss position,the stop loss order will be automatically triggered,and the position will be automatically closed.