Forex

Market Order. This is the most common type of order. When you enter a
market order, you do not specify a specific price. You simply state that you
want to go long, or short, “at market.” When you place this type of order, it
goes to the trading floor and is filled at whatever the current price may be.
Most of the time, it’s filled fairly close to what the price was when you placed
the order, but in “fast” or “thinly traded” markets it could be very different, so
be careful, and learn about the markets you are trading. This is also known as
“slippage.”
Limit Orders. Limit orders simply state a price limit that your order must be
filled. In other words, it must be filled at the price you specify, or better. Limit
orders have the advantage that you will know the worst price that you will pay.
One disadvantage is that you might not get filled at all if the price that day does
not trade within the price you requested.
Stop Orders. Stop orders are not executed until the price reaches a specific
point. When the price reaches that point, the stop order becomes a market
order. Most of the time, stop orders are used to exit a trade. You may have a
stop order to get out if the market hits 65.00, as an example. When the market
hits 65.00, your stop order becomes an open order at 65.00 to exit the trade.
You will probably “get out” at that price or very close to it.
You can have a “buy stop” order, which means you want to buy a contract, or
go long, and you can have a “sell stop” order, which means you want to sell a
contract, or go short. This way, your order is filled at that price or better.
Day Order. Day orders are good for only one day, the day you place the order.
Let’s say you want to go long Sept. 1999 Sugar. You call your broker and place
a day order (as a limit order or a buy stop order) at 6.50. This order would be
good only for the day you placed it. If the market did not reach 6.50 that day,
your order would not be filled. As an example, if the highest price Sugar
reached that day was 6.49, and your order was at 6.50, your order would not be
filled. Sugar could open the next day at 6.50, and rally to 7.00, but you would
not be in the market since your order the previous day was a day order and good
only on that day. If a Day order is not filled the day you place it, it’s
canceled at the end of the day. You have to place the order again the next
day.