When you start trading in Forex through a broker, you can choose all kinds of orders. By using the options the right way, you can maximize your profits and limit the risks.
A market order can be seen as a direct order. The broker will try to open the order as fast as possible. Your loss or profit on a position will immediately take effect. You can read more about profits and losses with trading CFDs in our special article.
A limit order is an order that will be executed at a certain value. As you know, you can go long and short. By using a limit order at a low value (buy) or a high value (sell), you can strategically place positions that automatically make money for you.
If the price constantly reaches a certain resistance during the week, causing the price to go up, you can place a limit order at that level. When the resistance is touched again, a position will automatically be opened and as long as the resistance isn’t breached you make money when the price goes back up.
Stop loss / take profit order
It’s also possible to use a stop loss or take profit. The position will then automatically close at those values. It’s recommended you always use a stop loss to make sure you limit your losses.
A trailing stop can be very interesting when you expect an increase followed by an immediate correction. A trailing stop is a moving stop loss. You set the trailing stop at a certain value and when the difference between the highest price and the current price is more than the value of your trailing stop, the position will close.Thus the trailing stop is a dynamic stop loss.