EXECUTIN G TRADE S

IN T HE MARKET
EXECUTING TRADES

BRIEF OVERVIEW
EXECUTING TRADES BRIEF OVERVIEW

- What is a Market order

- What is a Limit Order

- What is a Stop Order

- What is a Stop-Loss Order

- What is a Trailing Stop Order

EXECUTING TRADES

WHAT IS A MARKET ORDER?

EXECUTING TRADES WHAT IS A MARKET ORDER?

A market order is the most basic and simplest type of trade

execution in the Forex market.

It is an order to buy or sell a currency pair at the current market price.

When a trader places a market order,

they are effectively telling their broker to execute the
trade at the best available price at that moment.

This means that

the trader is willing to accept the current market price, regardless of
whether it is higher or lower than the price they originally intended to
trade at.

EXECUTING TRADES WHAT IS A MARKET ORDER?

For example

if a trader wants to buy if a trader wants to sell

the current the current

the EUR/USD & the EUR/USD &
pair market price is pair market price is
1.2000 1.2000

They would place a market They would place a market

order to buy the pair at 1.2000. order to sell the pair at 1.2000.
EXECUTING TRADES WHAT IS A MARKET ORDER?

One of the main advantages of using a market order is that

it guarantees that the trade will be executed quickly.

This is because the order is filled at the current market price, which
means that there is no need to wait for a specific price to be reached.

This is particularly useful in fast-moving markets where prices can

change quickly.
EXECUTING TRADES WHAT IS A MARKET ORDER?

Another advantage is that

it can be useful in times when a trader is looking to
enter or exit a trade as soon as possible.

On the other hand

One of the main disadvantages of using a market order is that
it doesn't guarantee a speci c price
fi
EXECUTING TRADES WHAT IS A MARKET ORDER?

Since the order is filled at the current market price,

the trader may end up paying more or receiving less than they intended.

This can be particularly detrimental in volatile markets where prices

can fluctuate rapidly.

In summary,
a market order is a quick and easy way to execute trades in the
Forex market, but it does not guarantee a specific price.

Traders should consider the current market conditions and their

own risk tolerance when deciding whether to use a market order.
EXECUTING TRADES

WHAT IS A LIMIT ORDER?

EXECUTING TRADES WHAT IS A LIMIT ORDER?

A limit order is an order to buy or sell a currency

pair at a specific price or better.

When a trader places a limit order,

they are telling their broker to execute the
trade at a specific price or a better one.

EXECUTING TRADES WHAT IS A LIMIT ORDER?

For example

if a trader wants to buy

they believe the price will

the EUR/USD pair & go up in the future

They can place a limit order to buy the pair at a specific price, let's say 1.2000.

This means that

- if the market price reaches or goes beyond 1.2000 the order will be filled
- if not, the order will remain open until it is filled or canceled.

EXECUTING TRADES WHAT IS A LIMIT ORDER?

On the other hand

if a trader wants to sell

they believe the price will

the EUR/USD pair & go down in the future

They can place a limit order to sell the pair at a specific price, let’s say 1.2000.

This means that

- if the market price goes down to 1.2000 or below, the order will be filled
- if not the order will remain open until it is filled or canceled.

EXECUTING TRADES WHAT IS A LIMIT ORDER?

A limit order allows a trader to set the specific price

at which they want to enter or exit a trade.

This can be particularly useful when the trader believes that

the market price will reach a certain level in the future.

EXECUTING TRADES WHAT IS A LIMIT ORDER?

One of the main advantages of using a limit order is that

it can help a trader to achieve a better price than if they used a
market order.

This is because the trader can set the specific price at which they
want to enter or exit a trade, which means that they are more likely
to get a better price than if they just accepted the current market
price.
EXECUTING TRADES WHAT IS A LIMIT ORDER?

More advantages of limit orders are:

- It gives the trader more control over their trades.
- By setting a specific price, the trader can limit their
potential losses or lock in their potential gains.

On the other hand…

one of the main disadvantages of using a limit order is that
it doesn't guarantee that the trade will be executed

EXECUTING TRADES WHAT IS A LIMIT ORDER?

If the market price never reaches the specific price set by the trader,
the order will remain open and may never be filled.

This can be particularly detrimental in fast-moving markets where

prices can change quickly.
EXECUTING TRADES WHAT IS A LIMIT ORDER?

In summary,
a limit order allows a trader to set a specific price at which they
want to enter or exit a trade.

It can be a useful tool for achieving a better price and gaining more
control over trades, but it doesn't guarantee that the trade will be
executed.

Traders should consider the current market conditions and their

own risk tolerance when deciding whether to use a limit order.
EXECUTING TRADES

WHAT IS A STOP ORDER?

EXECUTING TRADES WHAT IS A STOP ORDER?

A stop order, also known as a stop-loss order, is

an order to buy or sell a currency pair at a specific
price or worse.

When a trader places a stop order,

they are telling their broker to execute the trade at
a specific price or a worse one.

EXECUTING TRADES WHAT IS A STOP ORDER?

For example

if a trader wants to buy

they believe the price will

the EUR/USD pair & go up in the future

They can place a stop order to buy the pair at a specific price, let's say 1.2000.

This means that

if the market price falls to 1.2000 or below, the order will be filled, and
the trader will exit the trade with a loss.

EXECUTING TRADES WHAT IS A STOP ORDER?

On the other hand

if a trader wants to sell

they believe the price will

the EUR/USD pair & go down in the future

they can place a stop order to sell the pair at a specific price, for
instance 1.2000.

This means that

if the market price rises to 1.2000 or above, the order will be filled, and
the trader will exit the trade with a gain.

EXECUTING TRADES WHAT IS A STOP ORDER?

A stop order is mainly used as a risk management

tool, it allows the trader to limit their potential losses
by specifying a price at which they would like to exit a
trade in case the market moves against them.

This is why it is often referred to as a stop-loss order.

EXECUTING TRADES WHAT IS A STOP ORDER?

One of the main advantages of using a stop order is that

it can help a trader to limit their potential losses.

By setting a specific price, the trader can ensure that they will exit a
trade if the market moves against them.

This can help to protect their trading capital and avoid large losses.
EXECUTING TRADES WHAT IS A STOP ORDER?

Another advantage is:

it allows the trader to set a specific price at which they
want to exit a trade, which can be particularly useful in
volatile markets where prices can fluctuate rapidly.

On the other hand

one of the main disadvantages of using a stop order is that
it doesn't guarantee that
the trader will exit the trade at the speci c price they set
fi

EXECUTING TRADES WHAT IS A STOP ORDER?

If the market gaps,

the order might be filled at a much worse price than the trader intended.

This can happen when there is a sudden spike in volatility, and the
market moves a lot in a short period of time, causing the price to
jump over the stop-loss level.
EXECUTING TRADES WHAT IS A STOP ORDER?

In summary,
a stop order, also known as a stop-loss order, is a type of order
used to limit potential losses on a trade by specifying a price at
which the trader wants to exit the trade.

It allows the trader to exit the trade if the market moves against
them and can be a useful tool for risk management, but it doesn't
guarantee the specific price at which the trader will exit the trade.

Traders should consider the current market conditions and their

own risk tolerance when deciding whether to use a stop order.
EXECUTING TRADES

WHAT IS A STOP-LOSS ORDER?

EXECUTING TRADES WHAT IS A STOP-LOSS ORDER?

A stop-loss order is a type of stop order that is

specifically used to limit potential losses on a trade.

When a trader places a stop-loss order,

they are telling their broker to execute the trade at
a specific price or worse in case the market moves
against them.

The specific price is set by the trader and is typically below the
current market price for a long position (buy) or above the current
market price for a short position (sell).

EXECUTING TRADES WHAT IS A STOP-LOSS ORDER?

For example

if a trader buys

the current market price

the EUR/USD pair at 1.2000

and wants to limit potential losses, they can set a stop-loss order at 1.1980.

This means that

the market price falls to 1.1980 or below, the stop-loss order will be
triggered, and the trade will be closed at the best available price, which
is typically the stop-loss price or worse.

EXECUTING TRADES WHAT IS A STOP-LOSS ORDER?

A stop-loss order is an essential risk management

tool that helps traders to limit potential losses on a
trade by specifying a price at which they want to exit
the trade in case the market moves against them.

It allows traders to protect their trading capital and avoid large

losses.
EXECUTING TRADES WHAT IS A STOP-LOSS ORDER?

One of the main advantages of using a stop-loss order is that

it can help traders to manage their risk effectively.

By setting a specific price, traders can ensure that they will exit a
trade if the market moves against them.

This can help to protect their trading capital and avoid large losses.
EXECUTING TRADES WHAT IS A STOP-LOSS ORDER?

Another advantage is:

it allows traders to set a specific price at which they
want to exit a trade, which can be particularly useful
in volatile markets where prices can fluctuate rapidly.

On the other hand

one of the main disadvantages of using a stop-loss order is that
it doesn't guarantee that
the trader will exit the trade at the speci c price they set
fi

EXECUTING TRADES WHAT IS A STOP-LOSS ORDER?

If the market gaps,

the order might be filled at a much worse price than the trader intended.

This can happen when there is a sudden spike in volatility, and the
market moves a lot in a short period of time, causing the price to
jump over the stop-loss level.
EXECUTING TRADES WHAT IS A STOP-LOSS ORDER?

In summary,
a stop-loss order is a type of stop order that is specifically used to
limit potential losses on a trade by specifying a price at which the
trader wants to exit the trade in case the market moves against them.

It is an essential risk management tool, but it doesn't guarantee the

specific price at which the trader will exit the trade.

Traders should consider the current market conditions and their

own risk tolerance when deciding whether to use a stop-loss order.
EXECUTING TRADES

WHAT IS A TRAILING STOP ORDER?

EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

A trailing stop order is a type of stop order that is

used to lock in profits on a trade while allowing the
trade to continue to benefit from favorable
market movements.

When a trader places a trailing stop order,

they set a specific distance or "trailing amount"
away from the current market price.

The trailing amount is typically a percentage or dollar amount.

EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

For example,

if a trader buys

the current market price

the EUR/USD pair at 1.2000

and wants to lock in profits, they can set a trailing stop order with a
trailing amount of 50 pips.

This means that if the market price moves 50 pips in favor of the trade,
the stop-loss order will be moved to 1.1950, keeping the 50 pips profit.
EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

If the market continues to move in favor of the trade,

the stop-loss order will be moved again, maintaining the trailing
amount of 50 pips.

However, if the market starts to move against the trade and the
stop-loss order is hit, the trade will be closed at the best available
price, which is typically the stop-loss price or worse.
EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

A trailing stop order allows traders to lock in profits

while allowing the trade to continue to benefit from
favorable market movements.

It is a useful tool for traders who want to stay in a trade for a longer
period of time and capture as much profit as possible.
EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

One of the main advantages of using a trailing stop order is that

it allows traders to lock in profits while still allowing the trade to
benefit from favorable market movements.

This can help traders to maximize their profits and avoid premature
exits from profitable trades.
EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

Another advantage is
it allows traders to set a specific distance from the
current market price, which can be particularly useful
in volatile markets where prices can fluctuate rapidly.

On the other hand

one of the main disadvantages of using a trailing stop order is that
it doesn't guarantee a speci c pro t
fi
fi
EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

If the market gaps,

the order might be filled at a much worse price than the trader intended.

This can happen when there is a sudden spike in volatility, and the
market moves a lot in a short period of time, causing the price to
jump over the stop-loss level.
EXECUTING TRADES WHAT IS A TRAILING STOP ORDER?

In summary,
a trailing stop order is a type of stop order that is used to lock in
profits on a trade while allowing the trade to continue to benefit
from favorable market movements.

It is a useful tool for traders who want to stay in a trade for a longer
period of time and capture as much profit as possible, but it doesn't
guarantee a specific profit.

Traders should consider the current market conditions and their own
risk tolerance when deciding whether to use a trailing stop order.