MARKET ORDERS

A market order is executed immediately when placed. It is priced using the current spot, or market price. A market order immediately becomes an open position and subject to fluctuations in the market. This means that should the rate move against you, the value of your position deteriorates – this is an unrealized loss until the order is closed.

TAKE PROFIT ORDERS

A take-profit order automatically closes an open order when the exchange rate reaches a specified threshold. Take-profit orders are used to lock-in profits, for example, if you are long USD/JPY at 109.58 and you want to take your profit when the rate reaches 110.00, you will set this rate as your take-profit threshold.

If the bid price touches 110.00, the open position is closed automatically securing your profit. Trades are closed at the current market rate, in a fast moving market there may be a gap between this and the take-profit rate you had set.

TRAILING STOP ORDERS

A trailing stop order is used to restrict losses and avoid margin closeouts. It resembles a stop-loss in that it automatically closes the trade if the market moves in an unfavourable direction by a specified distance. The key feature is that as long as the market price moves in a favourable direction, the trigger price will automatically follow it by the specified distance.

This will allow your trade to gain value while minimizing the loss you are at risk for. For example, if you hold a long position the trigger price will move up if the market price moves up, but it will be unchanged if the market price moves down. Or, in a short position the trigger price will move down if the market price moves down, but it will stay unchanged if the market price moves up.