Forex traders, stock market investors or crypto community members can use different types of orders to open a trade. On Olymp Trade, you can execute a trade on the spot or use a trade order.
This free service can automatically open a trade if the specified conditions are met. Each type of order carries out its functions and can be used in different situations. You will learn more about them from this article.
Traders use this type of order to open a position at the specified price. For example, you want to buy bitcoin for $1000000, but now it costs $11000. In such a situation, you can place a price order, and specify the following:
- The type of asset. The asset chart that you open is selected by default.
- The trade execution level. A trade will be initiated automatically if the price reaches it.
- There are extra options of Take profit and Stop loss orders. Please note that Take profit cannot be less than +10% of the investment amount, and Stop Loss cannot be less than -10% of it.
- Select the trade type: Down – sell, Up – buy.
What do they use “price orders” for?
This tool simplifies the process of trading support and resistance levels. Here are the most common way to use it:
1. Trading the level reversal.
For example, there is a support level in the EUR/USD chart at 1,10000. The trend has reversed from it more than twice. A trader can buy an asset by placing the “price order” at the level of 1,10000.
2. Trading the level breakout. Traders may take a breakout of support or resistance levels as a signal of trend continuation.
For example, bitcoin is often trading close to important price levels. Let’s suppose that it has approached $20000 again, but has not broken it yet. You will agree that investors will start buying the coin more actively if the price goes above $20000.
In this situation, you might place a “price order” at the level of $20100 and start making money as soon as there is a breakout.
The actual quote of the “price order” execution may differ from the one specified due to the specifics of the mechanism. The quote may slightly change during the time interval between the triggering of the order condition and the trade execution, despite the fact that it lasts a nanosecond.
There is a different type of orders, which provides an opportunity to open a trade at the specified time. To do it, a trader should select the “by time” option and specify the necessary parameters in the usual way. The only exception is the key option—time selection.
What do they use “time orders” for?
Most often, such orders are used when trading the news from the economic calendar, as investors know the time when a report comes out beforehand.
For example, a trader expects to earn on the growth of the EUR after the EU GDP report comes out at 12:00 GMT. To do it, the trader places a “time order”, which will open a trade at 12:00 GMT.
Temporal patterns are another reason to use such orders, but they are quite a rare case in the market.
The time limit of orders
Each order you create will be active within 24 hours. If the specified conditions aren’t met during this time period, it will be automatically cancelled.
Why doesn’t an order work?
An order may not become a trade if the time limit has expired or if the necessary amount is not available in the trader’s account at the time of the trade initiation.