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introductory chapters Lesson 3 - Concepts and Types of Orders

Our next lesson to make money online using forex pips is about the famous and types of orders in the forex market.

What are pips?

When the price of a currency increases from 1.4765 to 1.4766 has been increased by 1 PIP. The pip is the last decimal of a quotation, the pip is how one measures the gains or losses.

The value of the pips also indicates how expensive or cheap on a market, the lower the value of a pip is the cheapest market.

Ex: The forex market of the Euro / Dollar. Value
pips (1.4766 - 1.4765) / 1.4765 = 0.0000677

Example: The silver market value
the pips: (16.21 - 16.20) / 16.20 = 0.00061728

We have the pip of silver is about 10 times the value of the Euro / Dollar


What is a position or item?

The spot forex market is traded in lots or positions. The standard size of a lot or position are 100,000 units. There is also a mini batch of 10,000.


What is a warrant?

The term order refers to the input or output of an operation, there are several types of orders, we will now see the main

• Market Order: A market order is an order to buy or sell the current market price. For example, the price of the Euro against the dollar in the forex market is 1.4756, you click to buy euros and running instantly, this is an operation of market order.

• Order Limit: A limit order is an order which is bought or sold at a price. The order has essentially two factors: price and duration. For example, you want to trade in the forex market of euro v / s dollar, want to go long (buy) euro once it has reached the resistance of 1.5000. You may be waiting in front of computers or make a limit order which provides that once the Euro 1.5000 exceeds runs a purchase order. The effect is a deadline that has passed after the order is void, in other words, an expiration date.

• Order Making Loss (Stop Loss): A Loss To Order or Stop Loss is one in which the price reaches a certain level and executing an order to close the transaction taking a loss. Is an order that aims to prevent further losses. For example, going long (buy) Euros at 1.4765 and the price begins to drop drastically and breaks the 1.4000 resistance, leaving a stop loss order at 1.4000 and once they cross that price close the deal (sold the Euro) taking the loss, limiting it to new lows in price.

• Order Make Profit (Take Profit): Similarly Make payable to loss, profit taking is an order to secure the gains made. Suppose that the Euro, taking the last example, up instead of down, make a take profit order to 1.4990 because we do not rise more than that and will be your roof. When the price reaches 1.4990 automatically shut off the operation and will be making a profit.

There are other types of orders are not as common but it's worth naming:

• GTC (Good til canceled), "Good until canceled" is an operation that remains active until you decide to cancel, your broker will not interfere for the closing. It is a very common type of transaction in the stock market in which it buys a stock and held until it decides to sell.

• GFD (Good for the day), "Good for the day": A GFD order remains active until the end of trading day. Here we must note that in a market open 24 hours, so the daily limits of the day (counted as deadline to time) is to ask your broker.

• OCO (Order cancel order), "Order cancels other order": An OCO order is limited by Make Loss (Stop Loss) with a Make Profit (Take Profit), the operation being bounded above and below. Once the price reaches one of these limits the operation terminates.

always have to know what type of order is operating, we must ask about the rollover (a fee to have an open operation more than a day). Manage order types and their features is an essential strategy.