Trading the forex market is not a hard job, but just like any job, it requires knowledge. One of the essential pieces of knowledge a trader needs is about trading orders. Currency trading is done with orders given to a computer, and without fully understanding that or using an automated system, a trader is doomed to fail. All forex orders can be given by an automated trading system, but it is good to know them, just in case.
The most popular order is the spot price order, which can be either buy or sell. A buy order will buy the currency pair at the ask rate, and the trader can profit in this situation when the exchange rate goes up. A sell order will either close a buy position or open a short sell position at the bid price, and in this case, the trader will profit when the exchange rate is going down.
A stop loss order is one of the most important orders in the forex market. Its job is to prevent big losses from becoming even bigger. It's a well known safeguard, and it is also very common in the stock market. A long trade, or a buy trade, will be terminated by a stop loss order when the exchange rate goes below the stop loss point. A short sell trade will be terminated when the exchange rate goes above the stop loss point.
Limit orders are also useful forex orders. These orders are future orders which are executed only when a certain price is reached. A buy limit order will be executed when the exchange rate of a certain pair is below or at a certain rate. A sell limit order will be executed when the exchange rate is at or higher than a certain point. One very famous limit order is the take profit order.
Taking profit is very important in the forex market, and the limit order is perfect for that. When the exchange rate reaches a certain point, the trade is automatically ended with a guaranteed profit. The take profit order can be place on both buy orders and sell orders, which guarantees traders their profits will be in their bank accounts easily.
You can avoid all the hassle of using the correct forex order by getting a forex trading system which does all the job for you. You can get one, such as Forex Funnel, from the Forex Funnel review of Great-Info-Products.com.
About the author:
Nadav Snir is a stock market trader and forex trader. You can find more information about forex trading and forex brokers at his site at http://Great-Info-Products.com/Forex/index.html