When you go to a restaurant, after you finished ordering, sometime the waiter or waitress may ask, “Would you like to order anything else?” In forex trading term ‘order’ is not the same as you will use in restaurant. The word ‘order’ here actually meant how you enter and exit a trading position. I have discussed about ‘normal’ orders in my previous article, now I will discuss about enhanced ‘orders’ you could use together with other orders when placing a trade.
GFD (Good for the day)
The order is meant to stay active in the market till the end of trading day. You may ask “but foreign exchange is open 24 hours” around the world so which trading day are we talking here. Mostly we will use US market time 5pm EST close. You might want to check with your broker first before using it.
GTC (Good Till Canceled)
A GTC order will remain active in the market until you cancel the trade. If GTC is in schedule, your broker will not cancel ant trade with this order in tag for you. It is your responsibility to cancel it.
OCO (Order cancel other)
This is my favorite order. An OCO is actually a mixture of two orders limit. The two orders with price that place above or below the current price. When one order is executed, the other order will automatically cancel. For example: The price of GBP/USD is currently at 1.4202. I want to buy at 1.4268 over the resistance level which I might anticipated a breakout or I will initiate a sell call at 1.4190 if it break the support level. Just understand it as if 1.4268 is reached, buy order will trigger or 1.4190 is reached, sell order will trigger.
All these enhance orders tool will definitely make your forex trading easier as you do not need to glue your eyes to the screen all the time afraid that you might misses any opportunity trade. But you do have to check with your broker as not all broking houses offer such enhanced orders.