Order Cancels Order( OCO) : Also Known As One Cancels Other

Category: Finance, Currency Trading.

When trading currencies online, there are several basic order types that you need to know. Market Order: Orders to get in or out of a position at the current market price.

While there are a variety of orders that may be placed, remember to keep it simple, especially you beginning forex traders. Execution is typically guaranteed, but price is not. Limit Order: Orders that specify that a trade must be executed at a specific price in the future. A market order ensures that you will get into or out of the market. Execution is typically not guaranteed, but rather a" best efforts" . Take Profit Order: A limit order that currency traders can use in an attempt to capture accrued profits and exit a position.

They can be used to enter or exit a position. Stop Order: A stop order is used most often to protect against accruing additional losses, although execution and price is not always guaranteed. The term" stop" refers to stopping a loss. The most common use of a stop order is to set an exit point for a losing trade to try to limit risk. Trailing Stop Order: A trailing stop order allows you to configure your stop order to continue to follow the price movement in real- time by specifying the distance in pips you would like your stop to move, depending on the market direction. Order Cancels Order( OCO) : Also known as One Cancels Other. As opposed to a hard stop like above.

After entering the market, a limit order to protect profits, and a stop- loss order to limit losses can be placed. Day Order: A day order remains in effect until the end of the trading day. When either the limit or the stop order is executed, it will cancel the other order automatically. Because the forex market is a 24 hour ongoing market, the end of the day is either a set hour or until the opening of the Asian market. It is the traders responsibility, to remember there, not the dealers is an open order. Good till Canceled Order( GTC) : A good till canceled order remains active until the trader decides to cancel it, or it is triggered by the parameters set by the forex trader.

When trading currencies in the forex market, stay away from complex order methodologies because of the increased possibility for mistakes and errors. The forex market is changing rapidly. It s just too easy to push the wrong button in a complex sequence during the fast moving trading hours. Even as recently as two years ago it was relatively rare to find a dealer who offered trailing stop orders. So keep abreast of new technology by reading articles and forum posts. Now it seems most, if not all do. Good luck in your currency trading!

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