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The FXCM Trading Station gives traders the ability to make six different types of orders:
This is your order to buy or sell at the price available at that time. In the Dealing Rates window, simply go to the currency pair you want and click on its buy or sell price.
The "Create a Market Order" window will appear, and you will see the current, updated price in the rate window. Here you can select your order type:
At Market (default) = Execution Certainty
Your entire order will be filled at the best available price(s) at the time the No Dealing Desk Forex Execution System receives it.
The order will usually be filled at the price you see on the screen. Occasionally, however, if the market has moved while you are making your order, the price may differ.
Market Range = Price Certainty
Use this option to limit your order to being filled at your price, or within a certain distance of the current price.
Example: If you set the Market Range to 5, as much of your order as possible will be filled no more than 5 pips away from the current price. If the price suddenly moves more than that, the order will not be filled. The advantage here is Price Certainty.
Use a "Close" order to close any currently open trade at the current price; your profit or loss will be added or subtracted from your account balance. Simply click on the Close price in the "Open Positions" window below (in this case, 1.47758), or select the trade and click the "Close" button at the top of the trading station.
A "Close Position(s)" window will appear:
This option allows a trader to buy or sell at a price different from the current price. Use this to automatically open a trade for you when the price you designate is reached—whether your computer is on or not. There are two types of Entry orders:
This is an order to make an "At Market" market order when the market touches a specific price. Use it when you want to enter the market at a less-favorable price than the current price (higher price if buying, lower if selling).
Why might you want a worse price? Example: The EUR/USD is currently 1.36415. You believe that the price reaching 1.40000 will confirm a continued upward trend—and a profitable trade. You also think that if it does not reach 1.40000, the price will fall. You therefore want to buy only if the price reaches 1.40000, and you do so with a Stop Entry order to Buy at 1.40000.
This is an order to enter the market at a better price than the current one. Limit orders are filled at a designated price, or better. When buying, lower prices are better, and when selling, higher prices are better. (Since FXCM No Dealing Desk Forex Execution allows you to place orders anywhere, you can even use limit entries to place orders inside the spread—to gain incremental price improvements.)
To make either a Stop or a Limit Entry order, click on the "Entry Button" at the top of the trading station, and choose the parameters of your order in the "Create an Entry Order" box.
This type of order will help you manage your risk by preventing one trade from wiping out an account.
This order automatically closes your entire position at the best available price once a certain price is reached. A Stop-Loss order can only be set at a price less favourable than the current price.
Example: If you buy the EUR/USD at 1.47739 and want the position to close automatically if it moves 100 pips against you, you would set a Stop-Loss order at 1.46739. (If you are short, you would set the Stop order above the current price, e.g., at 1.48739.)
To Set a Stop-Loss Order: When you open your trade with a Market or Entry order, click on the Advanced bar:
Alternate route: You can also enter a Stop-Loss order by selecting a trade in the "Open Positions" window, and clicking on the "Stop" button of the desired open position.
Once a Stop has been set, you will see the Stop price in the Stop column in the "Open Positions" window.
If the Close price touches 1.49380, the entire trade will be automatically closed, with the loss subtracted from your balance.
The trailing stop feature allows traders to place a stop loss order, which automatically updates to lock in profit while the market moves in your favor. Trailing stops can be placed by clicking the advanced button in the Create Market Order, Create Entry Order, or Stop Order window. Please keep in mind that this feature does not protect against losses.
Trailing stops in the FX Trading Station are dynamic, meaning they continually follow the market as it moves in your favor, even when the market moves only 1/10th of a pip. To set a trailing stop, you must first set a stop. This is the initial level where your stop order will start from. To make the stop order a trailing stop, simply check the Trailing Stop box. Then, for every 1/10th of a pip the market moves in your favor, the stop will move the same amount. So, if you bought, your stop will move up when the currency pair rises. If you sold, your stop will move down when the currency pair falls.
You buy EUR/USD at 1.5492(1) and place a 20-pip stop at 1.5472(1). You then check the Trailing Stop box to activate the trailing stop.
The EUR/USD then rises by 30.2 pips to 1.5522(3) with every single 0.1 of a pip, your stop automatically moves up to
1.5502(3), locking in your profits. The stop will continue to rise if the EUR/USD rises. If the EUR/USD falls, the stop will remain at 1.5502(3). If the EUR/USD falls to 1.5502(3), your stop will execute, and close your trade.
Re-Cap of Trade
If Market goes up 30.2 pips on EUR/USD
|New Market Price|
|New Stop Price|
While Trailing Stops do not protect against losses, the goal is to lock in your profits should the market move in your favor.
Important: Pay attention to your stop price.
You also have the ability to place stops and limits in terms of pips as opposed to setting specific price levels. Limits will be relative to the market opening price at the time the trade was opened. Stops will be relative to the market offsetting price at the time the trade was opened. The difference between the opening price and the offsetting price is the spread.
When buying, the open price is the ask, and the offsetting price is the bid. When selling, the open price is the bid, and the offsetting price is the ask. This logic is in place to prevent you from being stopped or limited out inside the spread if slippage occurs when you are trading with tight stops and limits.
Note: If you set a 10 pip stop using the Stop Distance feature, you are setting a stop 10 pips from the offsetting price PLUS the prevailing spread at the time was opened. See examples below.
Entry Order to buy 10K EUR/USD at 1.4500. Stop 50 pips, Limit 50 pips.
Entry order to buy 10K EUR/USD fills at 1.4500.
(1.4497 bid "offsetting" price / 1.4500 ask "open" price).
- Limit = 1.4550 (50 pips above 1.4500, the open/ask price).
If touched $50 profit.
- Stop = 1.4447 (50 pips below 1.4497, the offsetting/bid price).
If touched $53 loss.
(In this example, this loss incorporates the 3 pip spread (3 USD) when the trade was activated and filled, this being your transaction cost for the trade. The spread is your cost of transaction on any trade.
Entry Order to sell 10K EUR/USD at 1.4500. Stop 50 pips, Limit 50 pips.
Entry Order to sell 10K EUR/USD fills at 1.4500.
(1.4500 bid "open" price / 1.4503 ask "offsetting" price).
- Limit = 1.4450 (50 pips below 1.4500 the open/bid price).
If touched $50 profit.
- Stop = 1.4553 (50 pips above 1.4503 the offsetting/ask price).
If touched $53 loss.
Entry Order to buy 20K GBP/USD 1.6500. Stop 50 pips, Limit 50 pips.
Entry Order to buy 20K GBP/USD fills at 1.6500.
(1.6497 bid "offsetting" price) / 1.6500 ask "open" price)
- Limit = 1.6550 (50 pips above 1.6500 the open/ask price).
If touched $100 profit ($50 x 2 lots)
- Stop = 1.6447 (50 pips below 1.6497, the offsetting/bid price).
If touched $106 loss ($50 x 2 lots)
Entry Order to buy 10K GBP/USD 1.6500. Stop 50 pips, Limit 50 pips.
Entry price is slipped and fills at next best price 1.6505, 5 pips above 1.6500.
Entry Order to buy 10K GBPUSD fills at 1.6505.
(1.6502 bid "close" price) / 1.6505 ask "open" price)
- Limit = 1.6555 (50 pips above 1.6505, the open/ask price).
If touched $50 profit.
- Stop = 1.6452 (50 pips below 1.6502, the close/bid price).
If touched $53 loss.
A Limit order works much like a Stop-Loss order, but you set it to automatically close your trade when the more favourable price you selected is reached. Set a Limit order as you would set a stop order; the Limit price appears in the Limit column in the "Open Positions" window.
Once the market reaches 1.47674, the trade will automatically close, and the profits will be added to your balance.
OCO stands for "One Cancels Other." It simply means that if one part of the order is executed, the other part will be automatically canceled. On the FX Trading Station, Entry Orders that are linked as OCO orders will appear under the "OCO" section of the Orders window. For example, the two 30K EUR/USD sell positions shown below are linked as OCO. If one of these entry orders executes, the other order will be deleted.
Types of OCO Order
You can choose to make either "Simple OCO Orders" or "Complex OCO Orders".
Complex OCO Orders
Complex OCO orders allow you to link 2 or more entry orders to each other as OCO orders. These orders can be all in one currency pair, or across many currency pairs. There are several different ways to set Complex OCO Orders.
You manually place two (or more) entry orders (see how to create entry orders here). In the Orders Tab, you will see the two entry orders. To link them as OCO (one cancels other), simply right click on one of the Order ID numbers under the Order ID Column and select "Complex OCO".
A box will appear with your existing available entry orders. To link your orders as OCO you can select them individually and click "Add", or you can Select All. You will then see these orders move into the "OCO Orders" section of the box. Click "OK" to complete the order. You can even link as many orders as you like in this way.
If you already have an OCO order in place, you can click on an order and drag it around the Orders Window. If you drag an Entry order into the OCO section and your mouse pointer turns yellow, you can let go and the order will drop in as a new OCO order. If you click and drag an order over another order, your mouse pointer will turn green. Then you can drop the order and it will become OCO with the order you were pointing at.
The moment that any one of the entry orders that is a part of your Complex OCO Order executes, all the other order(s) in that OCO will be cancelled, and will disappear from your Orders Window.
“Simple” OCO Orders offer you a way to make 2 linked Entry Orders in the same currency pair with just a few clicks.
How to Create Simple OCO Orders
In the Dealing Rates window, right-click on the currency pair that you want to trade, and choose “Simple OCO”.
In the Simple OCO box that appears, you can set the trade size, and choose if you want both orders to be Sell orders, Buy orders, or one of each. When you click OK, your new OCO orders will appear in the Orders window.
The “Sync Rates” box is checked by default. When the "Sync Rates" box is checked, and you change either of the entry order prices, the software will automatically determine what the other entry order’s price should be. If your order is for a Buy and a Sell, the software will set the 2 entries an equal distance from each side of the current market price, and link them as OCO.
When the "Sync Rates" box is NOT checked, you can enter whatever values you wish for each order. They will still be automatically linked as OCO.
Some Uses for Simple OCO Orders
Simple OCO orders are well suited to taking advantage of range breakouts or pullbacks in a trend. For example, before an important news event, the market will often move sideways in a range. When the news is released, the price could break to the upside or to the downside. If you are expecting a break in either direction, you could place a Simple OCO order to buy above the range and to sell below the range.
When a currency pair is trending, the price will often pull back within the larger move of the uptrend, while other times, the price will break support or resistance and continue its trend. You can set the OCO order to buy above resistance and to buy at the trendline.