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Learn the different ways you can open and close a position – from a simple, immediate trade to an automatic instruction to trade in your absence. Orders can help you lock in profits or guard against loss; get to know the various types and see how to use them.
|Types of orders||Limits||Stops|
|What is an order?Market ordersEntry ordersClosing ordersOrder duration||What is a limit order?Limit entry ordersLimit closing orders||What is a stop order?Stop entry ordersStop closing orders|
An order is simply an instruction to open or close a trade.
There are a number of different types of orders that you can place, depending on whether you want to trade immediately or wait for a certain price. The most basic types of orders are explained below.
These are orders to buy or sell immediately at the best available market price.
Your market order will be carried out straight away as long as the market is liquid enough, i.e. there are willing buyers and sellers. You would use this type of order if you’re happy to trade at the current market price.
When an order is carried out it becomes a filled order: one that has either closed an existing position or opened a new one.
Entry orders can automatically open a trade for you when the market hits a certain level. You would use this type of order if you’re hoping for a particular price and don’t want to monitor the market constantly.
These are sometimes called orders to open.
These orders automatically close your existing trade when the market hits a certain price.
You can use them to lock in profits if the price moves in your favour, or cap your losses if the price moves against you.
These are sometimes called orders to close.
Entry and closing orders remain ‘working’ unless your conditions are met, at which point they will become filled orders. You’ll need to decide if you want your order to remain valid indefinitely, or be cancelled after a certain amount of time.
Good till cancelled (GTC) orders remain valid until you cancel them yourself or the order is filled. On some exchanges, a GTC order may only be valid for a specified period, so it may be worth checking with your broker.
Good for the day (GFD) orders remain active until the end of the trading day on which you place the order. Check with your broker to see when your chosen market closes.
Good till date/time (GTD) orders require you to select a date and time when you want your order to be cancelled if it hasn’t been filled.
To find out how to use orders when trading CFDs, just visit the orders section of our CFD trading module.