February 14, 2019, | AtoZ Markets - Forex order is a kind of order to a trader :sell currency or buy it. Orders allow to enter the market, get profits, control possible losses and trade according to the trader strategy. Entry orders are a valuable tool in Forex trading, which allows minor or major Forex participants to pre-set the price they would like to buy or sell a currency. There are several advantages of trading in Forex using entry orders that we will talk about today.
Forex orders in brief
The Forex order is placed at the specified price level for the currency pair. As soon as this price is reached, the order is executed. If the price never reaches the desired level, the order will not be executed.
Traders can think through all the little things to develop a good trading strategy, but if they fail to fulfill this plan, all the difficult work could be thrown into the garbage.
And here is where the use of entry orders comes into play. Entry orders allow pre-setting the price for which trader would like to buy or sell currency pairs and enter them into the transaction only if this price is reached.
Advantage # 1-entry orders save time
The first advantage is quite obvious. Entry orders save time. You do not need to be near the computer when the trend line is reached or when the price leaves the price channel. Trader can very easily add an entry order to automatically enter a trade if the price behaves as it should.
The order will wait for the right moment for the Forex player, allowing him/her to return to a pleasant pastime with their family or other work. You can also go a little further by setting conditional stops and limit orders to manage the transaction if the entry order is activated at the moment when you deal with other matters.
This allows traders not to worry about the fact that they are entering the transaction blindly, without controlling the corresponding orders. To do this, when placing an order, click the advanced settings button. You will see additional options for setting stop loss and limit. Stops and limits set in this way are not activated until an entry order is initiated and trade is opened. Therefore, there is no need to worry about the fact that the stop or limit works before the entry order.
Advantage #2-price control
The next advantage of entry orders is control over the price level. This means that traders can specify the desired entry point to the price level at which the transaction will be executed. This allows you to simplify trading without the need to constantly monitor the market.
Advantage # 3-entry orders save money
Forex entry orders also help to save money. To understand this better, consider how much time traders dedicate to trading each day. Most probably between 10 minutes to an hour (if we were looking at the average amount of time per day). This is because most have a day job, a family, or prior obligations to attend to. The next advantage that pending entry orders provides is that these Forex trading tools helps to save money. This is due to the fact that most traders have day jobs, family or other obligations.
Now compare this amount of time with the 24-hour working day during which the foreign exchange market is open. If you spend 10 minutes a day on placing deals, you see the market during 0.7% of the trading day. If you spend an hour on placing trades, you see the market within 4% of the trading day. Knowing this, how would you rate the chances that you will look at the market at the moment that is best for the physical placement of the position?
The chances are not very high. It is much more likely that the optimal time to enter a trade is 96% of the time when you are far from your computer. We have to trade during this small window, most likely we will have to use points to enter that are far from optimal. Using sub-optimal entry points naturally leads to loss of money.
Many traders are faced with this when they and start looking for setups to place several deals, after which they leave again. Although in reality, Forex trading players need to look for potential setups that they can enter with a pending entry order. You should try to get the best price, even if it is unavailable while you are physically sitting in a chair in front of the computer.
Advantage # 4-entry orders make trading more responsible
Every Forex trading strategy must have strict rules that are set before trading starts. This ensures that you know exactly what to do in any situation However, from time to time emotions (greed, fear, excessive self-confidence, and so on) can lead people away from their trading plan and cause them to take all possible blows on the market, hoping for luck.
Although in fact, it is only necessary to take carefully calculated risks where you, in your opinion, have an advantage. Entry orders (with stops and limits) basically eliminate the likelihood of such a development of events and allow strategy to do their job without the interference of emotions. Pending entry orders are a great way to maintain a responsible approach to strategies and to ensure thorough compliance.
Advantage # 5-support for trade on timelines
Trading at an arbitrary time interval may include more specific transactions that may correspond to upcoming market news, political events, or company results, depending on which market is being traded.
Traders can specify the duration of the entry order in the following way:
- “Until Cancel” - the entry order will remain active until the trader manually removes the order.
- “By date” - the application will be valid until the specified date.
The Forex market is open 24 hours a day, meaning, that no trader will be able to continuously monitor it. Therefore, it is crucial to have a way to carry out a trading plan that fits the personal schedule. In that kind of circumstances, entry orders might work as valuable tools for successful trading.
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