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Order Types

With CMS Forex, orders may be entered at any rate - inside or outside the existing spread - using the following order types:

  • Market Order - A market order is an order to buy or sell a specific currency, which is to be filled immediately at the currently quoted exchange rate. Market order trades are generally filled instantly in order to avoid hanging trades or delays.

  • Limit orders - When there are restrictions on the highest price to be paid or the lowest price to be received, it is a limit order.

    Example: If a trader is long USD/CHF at 1.46154, a limit order would be entered to sell dollars above that price, for example, at 1.49000.

  • Stop Loss orders - An order where an open position is liquidated at a specific price. Stop loss orders can be used to lower your exposure to losses if the market moves against you.

    Example: If the trader above is long USD at 1.46154, a stop loss order could be left at 1.45000, in case the dollar depreciates below 1.45000.

    As a rule, sell stops are filled on our bid, and buy stops are filled on our offer. This allows for the filling of client stop orders at the rate they requested in almost every case. In the rare instance that the market gaps over a requested rate, the stop is filled at the best available price. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. For example, if a stop order is placed to sell USD/CHF at 1.45331, the trader will be filled when the bid reaches 1.45331 (i.e. the bid/offer is 1.45331/495 ).

  • One Cancels Other orders (OCO's) - OCO stands for One-Cancels-Other. It is an order type that simply attaches two entry orders such that when the first is removed or executed, the second will be removed as well.

    Example: A trader longs EUR/USD at 1.46271, a typical OCO order would be a stop loss at 1.45621, and a limit (take profit) at 1.47001. If one part of the order is filled, the other is automatically cancelled.

  • If / Then Single - As the name implies, IF/THEN orders consist of two entry orders. If and only if the first entry order is executed, will the second entry order by placed. At this time, you will have a position in the market and a separate entry order that was placed.

    Example: If a trader places an 'If' limit order to buy EUR/USD at 1.06901 fifty points below the current market rate of 1.07401. The 'Then' part of the order would be a limit sell order to take profit at 1.07701 (eighty pips above the 'If' order execution rate of 1.06901). If the market dips to 1.06901 the 'If' order will execute and the 'Then' leg of the order will become active. Note: the 'Then' order could also have been a stop loss order at 1.06501 (40 pips below the execution rate of 1.06901).

  • If /Then OCO - This order is very similar to the IF/THEN order, except the “THEN” part of the order consists of an OCO order. This order is meant for creating an entry order, in which if it is executed, a stop and limit would be placed.

    An example of an If / Then OCO order would be to first place an 'If' limit order to buy USD/JPY at 118.801, fifty points below the current market rate of 119.301. The "Then" part of the order would be an OCO order: one leg of the OCO could be a limit sell order to take profit at 119.601, (80 pips above the execution rate of 118.80) the other leg a stop loss order to sell at 118.501 (30 points below the execution rate). If the market reaches 118.801, the "If" single order is executed, and the "Then" OCO order is activated. If activated, the execution of either leg of the "Then" OCO order automatically cancels the other.
Disclaimer: This information is for educational purposes only.