💹 Key Types of Trading Orders for Online Trading

 

Key factors to consider when selecting trading orders

Generally, these are the key factors to consider when selecting trading orders:

◙ General Market Conditions (Volatile, Trending, or Ranging market conditions)

◙ Risk Acceptance and Risk/Reward Ratio

◙ Technical Analysis factors (e.g., is the price near key support or resistance, or are any Chart Patterns forming?)

◙ Available Margin on the trader's account

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Major Types of Trading Orders

Trading orders are generally classified into two types: market orders and pending orders.

(1) Market Orders

👉 Use them when you need fast execution, especially when the bid-ask spread is narrow.

Market orders are executed at the best available market price. This type of order can be risky in volatile markets or when there are delays in execution.

■ Buy rate: the best current market offer price

■ Sell rate: the best current market bid price

Forex traders should prefer to open accounts with ECN Forex Brokers offering minimal latency and tight trading spreads.

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(2) Good-Till-Canceled (GTC)

👉 Although “Good-Till-Canceled” suggests the trading order stays active indefinitely, brokers usually auto-cancel these orders after 60 to 90 days.

This is a common order type that remains in the market until it is executed or canceled. This type of order is ideal for setting long-term entry points, profit targets, or stop-loss levels without the need to re-enter trades daily. However, it requires careful monitoring to avoid unintended executions if the market moves away and later returns to the specified price.

■ Buy rate: set by the trader

■ Sell rate: set by the trader

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(3) Good for the Day (GFD)

A Good-for-the-Day order stays active until the end of the trading day. It is either executed during the day or canceled at the day’s close.

■ For 24/5 markets, such as Forex, the trading day ends according to your broker’s server time.

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(4) One-Cancels-the-Other (OCO)

👉 By combining profit targets with stop-loss levels, these orders help traders automate and improve their money management.

The one-cancels-the-other order includes multiple trading orders. This can involve two entry orders, stop-loss orders, or both. When one order is executed, the other is automatically canceled. For example, if you want to trade a key price breakout but aren’t sure it will happen, you can place both a long and a short order at the same time. If the long order is filled, the short order is automatically canceled, and vice versa.

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(5) One-Triggers-the-Other (OTO)

👉 The One-Triggers-the-Other order links a primary order to one or more secondary orders, so that executing the first automatically activates the others.

The one-triggers-the-other order is the opposite of a one-cancels-the-other order. You place two orders, and when one is executed, the other is automatically triggered and executed as well. This allows traders to set entry, take-profit, and stop-loss levels in advance, ensuring disciplined trade management and reducing emotional decision-making.

An OTO order is an advanced and powerful trading order type that allows the automation of a trading strategy. Furthermore, it enforces strict risk management from the very start of the trade.

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(6) Stop-Loss Orders

👉 Always use a stop-loss to manage risk and protect your account from large unforeseen losses.

In general, a stop order is used to trade the market at a specific level. A stop-loss order protects your capital by limiting potential losses. For example, if important news is about to be released by the FED and you are long on EURUSD, a stop-loss helps limit the impact of the news on your trade. This order type is especially important for traders using high leverage.

■ Place wide stops, especially in volatile markets

■ Avoid trading during news releases

■ Adjust stops based on technical analysis and pivot points

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(7) Trailing Stop Orders

👉 A trailing stop order is a dynamic risk-management tool that adjusts your stop-loss as a trade moves in your favor, helping to protect against reversals while locking a part of your profits.

A trailing-stop order is like a regular stop-loss, but it is not fixed at a specific price. Instead, it adjusts automatically with market movements. A trailing stop will close a trade if the price moves against you by a set distance. For example, a 21-pip trailing stop will automatically close your trade if the market moves 21 pips against you. This order is especially useful for traders who want to follow strong trends, securing profits while limiting losses. It is particularly valuable for swing traders.

For long positions, you set a trailing amount below the market price; as the price rises, the stop rises with it, but if the price falls enough, it triggers a market or limit sell order. This lets traders ride upward trends without constantly adjusting exits, though it can be triggered by short-term volatility or price gaps.

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(8) Take-Profit Orders

👉 Professional traders run their profits (winning trades), as about 80% of annual profits usually come from just 5% of their positions.

A take-profit order closes a trade once a predetermined profit level is reached. If the asset’s price hits the specified level, the order automatically closes your position. Take-profit orders should be set carefully, based on current market conditions.

Typically implemented as a limit order, it defines the exit point in advance, helping traders lock in gains, reduce emotional decision-making, and work alongside a stop-loss order to create a risk-managed “bracket” around a position.

 

■ Forex Trading Orders

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