Base 6: Orders
The Market Orders
Market orders are executed as quickly as possible.
It can be a buy, sell or close order.
When I notice that the price will go up, I open a purchase order.
When the price stops rising, I execute a closing order.
When I notice that the price will go down, I open a sell order.
When the price stops going down, I execute a closing order.
Particularity on Forex
In the other markets, we close an order with a contrary order:
We close a buying position with a sale of the same size.
We close a sales position with a purchase of the same size.
On the Forex, we close an open position with a closing order.
Attempt to close with a contrary order results in 2 open orders.
Indeed, you can do "Hedging" on the same title, in other words
you can have a purchase order and a sell order at the same time.
The Pending Orders
Pending orders are placed orders that will execute later.
Pending orders are placed at predetermined levels.
They will be executed automatically when said level is reached.
There are Pending Opening Orders and Pending Closing Orders.
Pending Opening Orders are Stop Orders and Limit Orders.
Pending Closing Orders are Stop Loss and Take Profit.
Pending Opening Orders: The Stop Orders
The first category of pending opening orders are stop orders.
Do not get me wrong, in Forex a stop order is an OPEN order.
A Buy Stop is a purchase order that is higher than the current price
A Buy Stop will run in order of purchase when this price is reached.
Sell Stop is a buy order that is lower than the current price
Sell Stop will run in sell order when this price is reached.
Pending Opening Orders: The Limit Orders
The second category of deferred opening orders are the limit orders.
A Buy Limit is a buy order that is lower than the current price
A Buy Limit will run in order of purchase when this price is reached.
A Sell Limit is a purchase order that is higher than the current price
A Sell Limit will run in sell order when this price is reached.
Pending Closing Orders: The Stop Loss
Stop Losses are delayed closing orders.
They are used to limit losses in the event of a wrong decision.
A stop loss is positioned at a lower price than an open purchase order.
A stop loss is positioned at a price higher than an open sell order.
Pending Opening Orders: The Take Profit
Take profit are delayed closing orders.
They are used to cash earnings at a predetermined level.
A take profit is positioned at a price higher than an open purchase order.
A take profit is positioned at a lower price than an open sell order.
Pending Closing Orders: The Trailing Stops
A Trailing Stop is a stop loss to which a tracking distance has been assigned.
The trailing stop tracks your position according to the distance allocated.
It adjusts automatically as the position moves in your favor.
If the value of your position goes back, the stop follower will not back down.
Follower stops are used to reduce losses as much as to protect the gains of a position.
Expiration of Pending Orders: GTC and GTD
GTC stands for Good 'Til Canceled.
A pending order in GTC mode therefore has no expiry.
This is the default mode of any deferred order.
It will cancel only if we decide to cancel it manually.
GTD stands for Good 'Til Date.
It is assigned an expiration date including the time.
A pending order in GTD mode therefore has a pre-assigned expiration date.
It will cancel itself automatically on this date if it has not been executed.