Lesson 8: Uncommon Forex Trade Orders

During the previous lesson, we’ve discussed the common forex trading order that helps you in the market. Now, let’s delve into the uncommon ones.  

Despite being uncommon, these orders offer great functionality in your trading system if combined with the common forex orders.  

However, it’s important to note that brokers may or may not have all these orders on their trading platform. But if they do, then you’re lucky to experience the convenience of these orders.  

Lesson Highlight

• Traders set forex orders to manage and execute their trade at the best and optimal entry or exit points.
• Aside from the typical market order and limit order, forex brokers offer other forex orders. These orders help ensure proper execution and prevent slippage.
• These uncommon forex orders are best used with other orders to ensure maximum effectiveness.

Why Use Forex Orders? 

The forex market is volatile; it constantly moves from time to time.  

One effective way to battle that risky nature of the market is though forex orders. Essentially, these are your instructions for your broker when managing position through their trading platform.

With these orders, you have greater control over your position.  

With forex orders, you can enjoy these benefits: 

1. Take advantage of volatility 
2. Ensured execution 
3. Slippage prevention 
4. Avoiding emotional trading

Here are some of the uncommon forex orders you can maximize to keep your position in a favorable light: 

Good ‘til Cancelled (GTC) 

You can set a good ‘til cancelled order when you want to buy or sell a security at a lower or highest market price available.  

This order will remain active until you execute or cancel it yourself. That means that your order will run regardless of the time frame.  

You can use this order together with stop and limit orders. What it brings is your freedom to cancel if the market does not move in the expected direction.  

Sample Scenario:

Sky wants to buy a position of EUR/USD at 1.0930. But currently, the market price is at 1.1000. So, he still needs to wait until the market moves down so he can buy a position at a relatively lower price.  

What he can do is to place GTC order. Once the market reaches the preferred entry point before Sky cancels it, the trade will execute. 

Good for Day (GFD) 

The good for day order is known as time in force order. It means that it runs on the remainder of the trading day.  

Once the time runs out and the market does not meet your desired entry price, your broker will automatically cancel the order.  

For this order, the market has a whole trading day to reach your entry point. It remains active until the end of the trading day.  

Sample Scenario:

Lady heard that the Federal Reserve System will publish a monetary policy today. With that, she planned to enter EUR/GBP in today’s session because of the possible market movement. However, the current market price is 1.2679, which is higher than her liking. 

What she did was utilize the good for day order and set it to 1.2600. This way, her order will automatically be cancelled if the market doesn’t reach the price level at the end of the trading session. 

Good ‘til Date (GTD) 

When setting a good ‘til date order, you’re going to set a specific date for your order to run. This order is different from the GFD order, where your order only has the remainder of the trading day to execute or cancel. 

Unlike other time-in force orders, you can strategize your order duration without being obliged to cancel it yourself. 

Sample Scenario:

Ace expects that EUR/USD will rise in value. However, based on the current trend, it’ll not happen today. He decided to enter a long position with GTD order. He set an entry price of 1.0850 and an expiry date of 3 days from her entry.  

This way, his position will automatically be cancelled if the market does not reach the entry price within 3 days. 

One-Cancels-the-Other (OCO) 

The one-cancels-the-other is the combination of two orders, which can be entry and/or stop-loss orders. But as the name suggests, the other one will cancel when one order is triggered. 

This order can efficiently mitigate risks or lock in profits in case of market movement.  

Sample Scenario: Ester is torn whether to enter a trade at EUR/USD1.1000 or let it pass. She can’t afford to risk much but doesn’t want to miss out on the opportunities. 

After analyzing the market, she has decided to enter a position with a mini lot. However, she can only afford to risk 0.0010 for each unit. But in case of market moving into her favor, she’s willing to lock in her profit to also 0.0020 for each unit. 

She decides to set an OCO stop-order at 1.1020 and 1.0980. If the market moves downward and reaches the 1.0980 value, her position will automatically close to avoid losing more money. In result, it will cancel her other order. 

One-Triggers-the-Other (OTO) 

The one-triggers-the-other order (OTO) is completely different from OCO. 

Here, you set both take-profit and stop-loss level at the same. This way, you save time in setting two automated orders, the primary and corresponding orders. 

1. Primary order: This is the main order that you expect to be triggered first. Usually, this is a buy order position.  
2. Corresponding order: This is the secondary order that will only be triggered once the primary is triggered. Usually, this is a sell order position.  

The OTO order acts to automatically execute entry and exit position at your desire level. This way, you get to enter a position at a relatively lower price and mitigate losses by automatically exiting a position when the market snaps unexpectedly.