In contrast to the immediate nature of market orders, entry orders are pending positions whose purpose is to trigger when a certain price level is reached. These types of orders can be set to execute well ahead of time, and will only be executed if the specified price is reached. There are two primary types of entry orders stop entries and limit entries. In the retail foreign exchange market, the functional discrepancy between these two entry order types is largely semantic, and many brokers simply blur the differences by calling them both limit orders. But for those forex brokers that keep the delineation intact, traders simply need to learn and remember the defi nitions, which are as follows:
Buy stop — an entry order to buy at a price above the current price.
Buy limit — an entry order to buy at a price below the current price.
Sell stop — an entry order to sell at a price below the current price.
Sell limit — an entry order to sell at a price above the current price.
Unlike market orders, entry orders are primarily used by traders who are unable or unwilling to be watching real - time prices and waiting for trade opportunities at their trading stations. With entry orders, complete orders can be entered ahead of time that encompass the full trading lifecycle, including both the trade entry as well as the stop loss and profit target exits. These trade exits will be discussed in more detail in the next section. Entry orders may also be used as a tool for enforcing order entry discipline. Traders placing market orders at the current price are often prone to entering orders “ on the fl y, ” as a result of counterproductive emotions like greed and fear. In contrast, the mechanism of entry orders encourages traders to enter trades only if their specific predetermined price level and entry rules are met. Discipline is a tremendously vital factor in successful trading that will be discussed further in later .
Buy stop — an entry order to buy at a price above the current price.
Buy limit — an entry order to buy at a price below the current price.
Sell stop — an entry order to sell at a price below the current price.
Sell limit — an entry order to sell at a price above the current price.
Unlike market orders, entry orders are primarily used by traders who are unable or unwilling to be watching real - time prices and waiting for trade opportunities at their trading stations. With entry orders, complete orders can be entered ahead of time that encompass the full trading lifecycle, including both the trade entry as well as the stop loss and profit target exits. These trade exits will be discussed in more detail in the next section. Entry orders may also be used as a tool for enforcing order entry discipline. Traders placing market orders at the current price are often prone to entering orders “ on the fl y, ” as a result of counterproductive emotions like greed and fear. In contrast, the mechanism of entry orders encourages traders to enter trades only if their specific predetermined price level and entry rules are met. Discipline is a tremendously vital factor in successful trading that will be discussed further in later .
