Each and every one of the trades comprises of separate orders that are applied together to form a complete trade. All trades will have a minimum of two orders: one to enter the trade, and another to exit. A single order can either be a buy order or maybe a sell order. When a trader enters with a buy order, then he will exit with a sell order and vice versa.
The different types of orders
1. Market order
To buy /sell a commodity at the greatest obtainable price is a market order. Normally, this kind of order will be carried out instantly. On the other hand, the price at which this order will be carried out will not be guaranteed.
2. Limit order
A limit order is an order that puts a restraint on the price you wish to pay to buy a commodity or the price you wish to acknowledge to sell a commodity. Therefore, a limit order ensures a price, but performance is unsure. This is due to the fact that the commodity may not attain the price at which the order was positioned at the intraday trading.
3. Stop Loss order
Stop orders are same as market orders but they are only processed when or if the market attains a particular price. Stop orders are actioned as market orders, hence if the stop/trigger price is hit, the order will at all times get fulfilled, but not essentially at the price that the dealer planned. Stop orders will set off when the market trades at or past the stop price. The stop price has to be more than the present price for a buy order, and below the present price for a sell order. Stop orders can be applied to enter a trade, and also to exit.
4. Stop Limit Orders (STPLMT)
Traders will generally mix a stop and a limit order to modify what price they obtain. When utilizing a stop limit order, the stop, as well as limit prices of the order, will not be same. Stop limit orders will continue pending till someone else is ready to carry out at the stop limit order prices, or better. A "Stop-Limit order" is a cross order with attributes of both stops and limit orders. This order has to be triggered at a price which is equal to or more than the confirmed limit.
A market-if-touched order (MIT) is an order to purchase or deal futures contracts that are executed at the first obtainable price after a particular price has been attained. An MIT order is not same as it triggers a filled market order, except for a locked limit meaning there is no trading.
It is sensible to set a ‘limit order’ at a price range that is nearer to the preceding day's closing price rather than a market order. This will help you to shield yourself from purchasing at a price that is very high or trading at a price that is very less. This assists you avert the likelihood of receiving a freak rate, as market orders are accomplished at the most excellent feasible counter rate.