Welcome to Lesson 7 of the Basic Forex Education series by PROP365. In this video, we explain the different types of forex orders and how each one is used to manage trades efficiently and reduce risk.
What Are Forex Orders?
Forex orders are instructions given by traders to brokers on how they want to enter or exit the market. Understanding different order types is crucial for executing trades effectively and managing risk.
What Is a Market Order in Forex?
A market order is the most straightforward type of forex order. It tells your broker to buy or sell immediately at the best available price. While it guarantees execution, it doesn't guarantee the exact price you see—especially in fast-moving markets.
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What Is a Limit Order?
A limit order sets a specific price at which you want to enter or exit a trade.
Buy Limit: You set a price below the current market rate. You’ll only buy if the price drops to this level. Example: If EUR/USD is trading at 1.1050, and you want to buy only if it hits 1.1000, you set a buy limit at 1.1000.
Sell Limit: You set a price above the current market rate. You’ll only sell if the price rises to this level. Example: If EUR/USD is at 1.1050, and you want to sell only at 1.1100, set a sell limit at 1.1100.
What Is a Stop-Loss Order?
A stop-loss order is designed to protect you from excessive losses.
It triggers a market order once the price hits your specified level.
For example, if you bought EUR/USD at 1.3000 and set a stop-loss at 1.2980, your position will close automatically if the price drops to 1.2980—limiting your loss to 20 pips.
Stop-loss orders are essential for risk management. Use them every time you trade to avoid wiping out your capital.
Why Should You Use Forex Orders?
Using different types of forex orders allows you to:
Control entry and exit points
Limit losses automatically
Avoid emotional trading
Trade efficiently, even when away from your screen
Key Terms Recap (Table):
Order Type
Description
Price Relation
Market Order
Buy/sell immediately at best price
At market
Buy Limit
Buy only at a lower price
Below market
Sell Limit
Sell only at a higher price
Above market
Stop-Loss Order
Auto-sell/buy to prevent large losses
Below (buy) / above (sell)
At PROP365, we equip traders with tools and knowledge to manage trades with precision. Mastering forex order types helps you automate smart decisions, reduce risk, and stay in control—even in volatile markets.
