Types of Forex Orders
Understanding How to Enter and Exit Trades
Introduction
In Forex trading, you don’t simply “buy” or “sell.”
You place orders.
An order tells your broker:
• What currency pair to trade
• Whether to buy or sell
• At what price
• Under what conditions
Understanding order types is essential because the wrong order can increase risk.
1️⃣ Market Order
Buy or Sell at the Current Price
A Market Order executes immediately at the best available price.
Example:
If EUR/USD is trading at 1.1000 and you place a market buy order, your trade will be executed instantly near that price.
When to Use Market Orders
• When you want instant execution
• During strong momentum
• When timing is more important than price precision
Important Note
In fast markets, price may change slightly before execution. This is called slippage.
2️⃣ Limit Order
Buy or Sell at a Better Price
A Limit Order allows you to enter the market at a specific price you choose.
There are two types:
Buy Limit
You place it below the current price.
You expect price to drop before rising.
Example:
EUR/USD is at 1.1000
You place a Buy Limit at 1.0950
Trade triggers only if price falls to 1.0950
Sell Limit
You place it above the current price.
You expect price to rise before falling.
Example:
EUR/USD is at 1.1000
You place Sell Limit at 1.1050
Trade triggers only if price reaches 1.1050
3️⃣ Stop Order
Enter When Price Breaks a Level
Stop orders are used to enter trades when price moves strongly in one direction.
Buy Stop
Placed above current price.
Used when expecting breakout upward.
Sell Stop
Placed below current price.
Used when expecting breakdown downward.
Stop orders are common in breakout strategies.
4️⃣ Stop Loss
Your Protection Tool
A Stop Loss automatically closes your trade at a predetermined loss level.
It prevents emotional decision-making.
Example:
You buy EUR/USD at 1.1000
You set Stop Loss at 1.0950
If price drops to 1.0950, trade closes automatically
Stop loss is mandatory for beginners.
5️⃣ Take Profit
Locking Your Gains
A Take Profit closes your trade automatically when price reaches your target.
Example:
Buy at 1.1000
Set Take Profit at 1.1100
Trade closes automatically at profit
Professional traders always define both:
• Risk level (Stop Loss)
• Reward target (Take Profit)
Difference Between Stop Order and Stop Loss
This confuses many beginners.
• Stop Order → Used to ENTER a trade
• Stop Loss → Used to EXIT a losing trade
They are completely different tools.
Why Order Types Matter
Using the correct order:
• Improves entry accuracy
• Controls risk
• Reduces emotional trading
• Creates structured trading discipline
Forex trading is not random clicking — it is planned execution.
Beginner Advice
Start by practicing:
• Market orders
• Stop loss placement
• Take profit calculation
Use demo accounts before trading real money.
Final Thoughts
Order types are the foundation of practical trading.
Mastering them separates beginners from serious traders.
Before focusing on profit strategies, learn how to control entry and exit properly.