Order Types

The trading platform provides sophisticated order entry and tracking of market orders, entry orders, stop/limit entry orders, and stop-loss orders. All of the above orders have the option of Day Order (DO), Good Until Friday (GTF) and Good Until Cancelled (GTC), which is valid until the order is executed,expired or cancelled.

Limit Orders

A limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. The trader specifies the price at which he wishes to buy/sell a certain currency pair and also specifies the duration that the order should remain active.

GTC (Good till cancelled): A GTC order remains active in the market until the trader decides to cancel it. The dealer will not cancel the order at any time therefore it is the customer's responsibility to remember that he possesses the order.

Day Order (Good for the day): A D.O. order remains active in the market until the end of the trading day. Since foreign exchange is an ongoing market the end of day must be a set hour.

GTF (Good till Friday): A GTF order remains active in the market until the end of the trading day on Saturday 04:00 hours. The dealer will not cancel the order at any time therefore it is the customer's responsibility to remember that he possesses the order.

Stop orders

A stop order is also an order placed to buy or sell at a certain price. The order contains the same two variables, price and duration. The main difference between a limit order and a stop order is that stop orders are usually used to limit loss potential on a transaction whilst limit orders are used to enter the market, add to a pre-existing position and profit taking. The same variations are used to specify duration as in limit orders (GTC, GTF and Day Order). Let's take the following example:

Example: Trader x Buys EUR/USD 1 lot @ 1.1840, he's expecting a 60 to 70 pip move in the market but he wants to protect himself in case he has overestimated the potential strength of the Euro. He knows that 1.1810 is a strong support level so he places a stop loss order to sell at that level. Trader x has limited his risk on this particular trade to 30 pips or USD 300.

Another usage of a stop order is when a trader is expecting a price breakout to occur and wishes to grasp the opportunity to 'ride' the breakout. In this case a trade will place an order to buy or sell 'on stop'. To illustrate the logic behind this let's review the following scenario:

Example: Trader x sees EUR/USD breaking through the 0.9390 resistance level. He believes that if this happens, the price of EUR/USD could be headed to 0.9450 or over. At this point the market is at 0.9350 so trader x places an order to initiate a buying position of 3.5 lot at 0.9392 'on stop'.

OCO

An OCO (order cancels other) order is a mixture of 2 limit and/or stop orders. 2 orders with price and duration variables are placed above and below the current price. When one of the orders is executed the other order is cancelled. To illustrate how an OCO order works let's take the following example:

Example: The price of EUR/USD is 0.9340. Trader x wants to either buy 3 lot at 0.9395 over the resistance level in anticipation of a breakout or initiate a selling position if the price falls to 0.9300. The understanding is that if 0.9395 is reached, he will buy 3 lot and the 0.9300 order will be automatically cancelled.