Slippage
Slippage is a trade executed between a buyer and seller
where the resulting buy or sell transaction is
different than the price seen just prior to order execution.
On average, one to six pips will be lost with
Market Orders, perhaps more, due to slippage. Market Orders
are rarely filled at the exact, anticipated
price. Market Traders Institute recommends caution when
entering or exiting with a Market Order.
Limit Orders
Limit Orders are orders given to a broker to buy or sell
currency lots at a certain price or better. The
term "Limit" means exactly what it says. Most of
the time, you will buy at that exact limit price or better.
Limit Orders are used to enter and exit the market. They are
generally used to acquire a specific price,
avoid slippage and unwanted order fills (execution price),
which can happen with Market Orders.
When selling above the market, it is a Limit Order.
When buying below the market, it is a Limit Order. A Limit Order will be executed when the market trades through it. Seventy to ninety percent of the time, if the market is trading at your Limit Order, it will be executed. The market must trade through your specified Limit Order number to guarantee a fill. The trading software provides notification within
When buying below the market, it is a Limit Order. A Limit Order will be executed when the market trades through it. Seventy to ninety percent of the time, if the market is trading at your Limit Order, it will be executed. The market must trade through your specified Limit Order number to guarantee a fill. The trading software provides notification within
seconds of the fill. A trader does not have to call his
broker to see if their order has been filled.
Stop Orders
Stop Orders are orders placed to enter or exit the market at
a desired, specific price. When buying
above the market, it is a Stop Order. When selling below the
market, it is a Stop Order. Stop Orders turn
into Market Orders when the market trades at that price.
Stop Orders, as well as Market Orders, are
subject to slippage, Limit Orders are not.
The majority of Stop Orders are used as protective, Stop
Loss Orders. These orders are placed with an
Entry Order to ensure an exit when the market goes against
you. A good trader never trades without a
protective Stop Loss Order. They are orders executed to get
you out of the market when your trade has
gone against you. Protective Stops are discussed in depth in
the Ultimate Traders Package on Demand.
Thank you
Wait for What Types of Orders Provide: part-3
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