Margin order types

The Forex trade includes a number of order types that facilitate transactions and make them more efficient. We will define some of the most common terms below.

Limit

A limit order is usually used to enter or exit a market at a certain price, better than the market rate. In addition, the investor can use a limit order to manage the period during which an order remains open, before it is cancelled.

Stop if Bid

A Stop if Bid order is used to buy or sell currency if the bid rate breaks through a certain rate level in the market. Stop if Bid orders are usually used to buy a Forex position as soon as a certain level is passed.

Stop if Offer

A Stop if Offer order is used to buy or sell currency if the ask rate breaks through the level indicated in the price field. Stop if Offers orders are usually used to sell a Forex position, to ensure that a certain level is passed. Relating orders provides the investor with a logical link of order types, allowing him to control the market fluctuations which makes it easier to traded in moving markets.

One Cancels Other (OCO)

The most common linked order, OCO, determines that, if a part of the order is executed, the other part is automatically cancelled. In the Forex trade, OCO usually refers to a purchase- and sell order linked together, so that when one of the orders is executed, the other is cancelled. You can see the OCO as follows: the trader protects a current position against loss (stoporder) while ensuring profit-taking (limit order).

If Done (ID)

This conditional order, also known as secondary order, only becomes active if the primary order is performed first. An example of this is an existing order to traded EURUSD at 1.2500 and a secondary order to sell at 1.2400 Stop if Bid – if the first order has been executed.

Trailing Stop

A trailing stop order is a stop order with a variable price that changes as the spot price changes If the market is ascending (for ascending/long positions) the stop price increases in line with the pace determined by the user, however, if the market price drops the stop price remains unchanged. This type of stop order helps an investor establish a limit for the maximum loss, without restricting the possible profit regarding a position. It also reduces the necessity to keep track of the market prices of open positions.