What Orders Do I Need to Know to Trade FOREX?

The vast majority of traders can fully work their trading method with market, limit, and stop orders. Be sure you are clear on the difference between limit and stop orders for both buying and selling a currency pair. You liquidate an order by closing it, not by initiating an opposite position.

Know which type of orders you need, and know how they work.
Make sure that you and your broker are on the same page with respect to what they mean. Test your orders thoroughly in a demo account. A few trading systems require substantial order manipulation, but your time is generally better spent studying the markets than worrying about how to execute complicated order strategies and techniques.

The author strongly recommends the new trader place a market order to enter a trade and place both a fixed-dollar stop-loss and fixed-dollar take-profit order simultaneously. Then, sit on your hands and watch. At this time, the mechanics are the main interest, and getting a feel for how currency pair prices move. Whether or not you win or lose on a test trade is not important. In Part 4, you will begin learning specific trading techniques required to trade both a demo and a live account. Start slow, learn, move on to the next step. Do not bite off more than you can chew.

Tip: You have four areas of interest in a demo account at this time: (1) the order process, (2) the accounting process, (3) platform features, and (4) how currency prices move. Trading, for now, is just a means of learning these processes, nothing more.

Practice, Practice, Practice!
By Michael Duane Archer
Michael Duane Archer has been an active futures and FOREX trader for more than 35 years. He has worked in various advisory capacities, notably as a commodity trading advisor, registered SEC investment advisor, and branch manager for Heinold of Hawaii. He currently trades FOREX and futures and is involved in several technical analysis research projects.

Copyrighted 2020. Content published with author's permission.

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