Currency Trading Tutorial

Types of Orders;A trader must understand what each order is,what it and what part it plays in capturing profit:sellers are asking for a high price,buyers are bidding at a lower price,trading is an auction,slippage occurs with most market orders,the difference between the ask and bid price is the spread

A foreign exchange trader must use three types of orders;a market order,a limit order,and a stop order.The two primary orders used for entering and exciting the market are a limit order and a stop order.Once an order is placed to enter the market,there are two critical procedures:one-cancels-the-other,and cancel-and-replace.Properly executing orders and understanding these procedures are a vital steps to a profitable trading.Remember all good carpenters carry a toolbox.The sharper the tools and the more skilled he is at using them,the more effective he is.The sharper you become as a trader,the more efficient and lucrative you will be.

What Orders do:A clear understanding of what each other does is essential before executing orders.Market Orders:A market order is an order that is given to a broker to buy or sell a currency at whatever the market is trading for at the moment.It can be an entry order into the market or an exit order to get out of the market.Traders use market orders when they are ready to make a commitment to enter or exit the market.One Cancels the Other:Whenever entering the market,place a protective stop loss order and establish a projected profit target.That projected profit target can be your limit order.If you simultaneously place both limit and stop loss orders when you enter the market,you can One Cancel The Other them and walk away from your computer.What does that mean?At some future point in time either your stop order or limit order will be executed,automatically canceling your opposing orders.If the trader is so sure about the trade,he can execute an One Cancels the Other order and walk away from the trade.The trading software will then manage the trade.Cancel/Replace Orders:A Cancel/Replace order is a procedure and not an entry or exit orders.By definition it is when the trader cancels an existing open order and replaces it with a new order.A cancel/replace order is primarily a strategy of trading and is predominantly used after one has taken a position in the market and wants to stay in the market locking in profit.For example,you buy Swiss Francs at 1.410 your protective stop loss order is 1.390.The market moves in your direction as projected,you now want to reduce your potential loss,so you cancel your stop order at 1.390 and replace it to 1.410 where you got in.You are now in a trade with no risk.As the market moves further north in your direction,now you want to lock in your profit.You cancel your 1.410 stop loss order and replace it with a new 1.440 stop loss order.You now have locked in 3o pips in profit.You are now in an all win,no risk trade.You keep canceling and replacing your stop until you are finally stopped out.

Adesegun Adetunji is an internet marketer with over 4 years of experience,he is dedicated to helping people stay informed about foreign exchange trading.For more information and in-depth unbiased reviews like this one,please Click Here!