Traders typically use these orders to set up a purchase that only comes into effect once the market price crosses their desired threshold. Limit orders are orders that allow you to register your intention to either buy or sell an instrument, but only once certain conditions specified within the agreement have been met your order is pending up until this time, and as such your account totals or margin balance won’t be affected until it’s been executed. Market orders are the primary order type used by day traders and ‘scalpers’ - those speculators who buy and sell small amounts of currency frequently throughout the day to capitalise on slight fluctuations in value - due to their convenient, quick-fire nature and the lack of additional considerations required. However, if the value of the security goes down, you effectively lose money unless you wait until the market bounces back any losses are unrealised in real terms until the order is finally closed. These orders are best utilised for ‘easy wins’ at times when the market conditions seem ideal. Market orders are the most common and straightforward type of forex order - they are executed instantly using the best spot/market price available at that moment in time, immediately becoming an open position and therefore vulnerable to fluctuations in the wider market.

Here are a few of the most common order types to keep in your arsenal: Market Order New traders should take some time to understand how each type of order works in practice - and, ultimately, which ones are best suited to their own trading style and overall strategy. Modern forex brokers offer a variety of different order types that are specifically designed to let you set various limits and conditions for your trades, so you can help safeguard yourself should the worst happen and the market moves against you.

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