What We Need To Access the Market and Trade It - Part IV

Types of Orders

There are many different types of orders, some of which are specific to stock trading. Fortunately, it is not necessary for us to learn all of them.

In my opinion, it is enough to examine only those orders which are used in MetaTrader 4 – this will encompass the types of orders which are most commonly used in the FOREX market.

Client terminals allow the preparation of requests to the broker for execution of trading operations. Moreover, a terminal allows control and management of open positions. To achieve this, several types of trading orders are used.

An order is a client's commitment to a brokerage company to perform a trade operation.

The types of orders we will be using are:

Market Order

A Market Order is a commitment to the brokerage company to buy or sell a security at the current price. Execution of this order results in opening of a trade position.

Securities are bought at the ASK price and sold at the BID price.

Stop Loss and Take Profit (I will explain what is it in the next post) orders can be attached to a market order.

The Execution mode of market orders depends on the type of security traded.

Pending Order

Pending order is the client's commitment to the brokerage company to buy or sell a security at a pre-defined price in the future. This type of orders is used for the opening of a trade position provided the future price quotes reach the pre-defined level.