Trading order types with TradersClub24 experts – applying them effectively
With trading order types, expected buying and selling prices can be better planned
The TradersClub24 contains a lot of valuable information that can be used to put the success of investment on an even greater knowledge foundation. Simply put, an order refers to the placing of a purchase or sale to the broker. The order buys or sells securities or derivatives. A purchase or sale order can be designed by additional information so that the transaction is performed only when certain conditions are met. In addition, you have the possibility to supplement each order with a Stop Loss or a Take Profit.
With the help of Stop Loss, you can set a price target where the order is automatically closed if the trade does not develop in the direction as desired or predicted. With take profit, you define the profit threshold at which the position is automatically terminated by the broker.
Significant types of trading orders for the purchase of securities
The Market Order has gained enormous importance, especially through the fast data transfer or transmission of orders in the area of trading order types. As an investor, you place the order to purchase a security at the current price or at the next possible execution. The advantage: You can calculate the cost price immediately and align your strategy. From this point on, you will benefit from rising or falling prices depending on whether you have opened a buy or sell order.
The trading order type “Buy Stop” is particularly interesting when you expect prices to rise as investors. For example, take the current 200 day line as an orientation and do not want to buy a security until this value has been exceeded, so enter the buy stop order.
For example, if you want to buy a default value at a price that is favorable on a day-to-day basis, you could enter a normal purchase limit. This would be your maximum price per piece (before fees). This is one of the types of trading orders that are probably most commonly used.
Trading order types for closing positions (sale)
“At the best available price” is the limit for an order when the sale is to be carried out at the current market price or with the next achievable execution. Among the trading order types for a sale, this is the fastest variant.
A “Sell Limit Order” (could also be referred to as a “profit take- or “profit assurance” if you have previously opened a buy position and want to close it in profit). If you use the addition of Take Profit in your buy order, this profit protection is reached with the help of a sell limit order. You can also use this order for your initial position opening. A Sell Limit Order can be used especially if you expect the price to reverse as soon as the limit level is reached.
When selling securities, you can also place an order that triggers the sale just when a price level you set is lower. The main idea behind this type is that they take the upward trend of a security with them and then, so to speak, pull the automatic rip line if the trend reverses. This order is called a Sell Stop Order.
This small overview of some trading order types or limit entry should invite you to think about securities and investment strategies. In view of the widest possible reduction in interest rates on bonds and fixed-income securities, alternative forms of investment, for example in the form of day-trading, are almost indispensable. So register today for guest access at TradersClub24 without obligation and learn all about Stop Loss,Take Profit, Trailing stop and other trading order types. In any situation, you are equipped to open and close your position correctly.
Trading Order types
- Market Order
- Buy Stop Order
- Sell Stop Order
- Buy Limit Order
- Sell Limit Order
- Trailing Stop Order
- Take Profit Order
1. Market Order
A market order is the most common trading order type. Execution is either at the currently offered price or the next available price. Important: not every price is offered by the broker or liquidity provider, so there are minimal price gaps. These gaps can also arise when the market is volatile, such as the publication of US labour market figures or key interest rates. So if the market order is executed at the first available price, it is called Slippage. There are positive and negative slippage that your broker passes on to you.
As part of the trading order types, a purchase order is executed at the Ask price and a sales order at the bid price. Between the price of a purchase order (Ask price) and the sales order (bid price) lies the so-called spread. This spread is only ‘paid’ when a position is opened and is the reason why every trade is always in negative territory in the first second. This is because the trading platform already takes into account directly the price at which the position is closed again.
2. Buy Stop
This trading order type is chosen when prices are assumed to rise. The Buy Stop Order is above the current price level. However, this will not be carried out until a certain price level has been reached on the market. It is hoped that prices will move upwards.
This trading order type of the pending order is selected if falling market prices are predicted. The Sell Order is below the current price level. However, this will not be carried out until a certain price level has been reached on the market. One hopes for a movement towards further falling prices
Among the trading order types, pending orders are chosen if one speculates on a price reversal in a downward movement. The Buy Limit Order is below the current price level. Trades of this type are placed with the expectation that the price will fall to a certain level and rise again.
3. Trading Ordertyp - Sell Stop Order
This trading order type of the pending order is chosen when it is assumed that the price will fall. The sell order is below the current price level. However, it is executed only when a certain price level is reached in the market. One hopes for a movement to further falling prices.
4. Trading Ordertyp - Buy Limit Order
Among the trading order types, Pending Order is chosen when speculating on a price reversal in a downward movement. Buy Limit Order is placed below the current price level. Trades of this type are placed with the expectation that the price will fall to a certain level and rise again.
5. Trading Ordertyp - Sell Limit Order
This trading order type of the pending order is chosen if one speculates on a price reversal in an upward movement. The Sell Limit Order is above the current price level. Trades of this type are placed with the expectation that the price will rise to a certain level and fall again.
6. Trading Ordertyp - Stop Loss Order
The Stop Loss Trading Order type is used to limit losses if the market runs contrary to its expectations. Setting a Stop Loss Order automatically closes open positions when the specific price level, which is predetermined, is reached. In a longer-term movement, it is advisable to keep dragging the price level of the Stop Loss Order over and over again in order to keep at least some of its profits in the event of a trend reversal. To identify such meaningful brands, stop losses are set to a previous low or high, or using indicators such as ATR.
7. Trading Ordertyp - Trailing Stop Order
In the trading order types, Trailing Stop is an automatic stop loss order that can be set at a defined distance outside the current market price. A trader sets a trailing stop for a long position below the current market price; for a short position, they set it above the current price. A trailing stop is designed to protect profits and keep trades running when there are only small price resets. For larger resets, namely where the trailing stop has been set, it closes the trade. A trailing stop is, so to speak, a “following stop loss”.
8. Trading Ordertyp- Take Profit Order
The trading order type Take Profit is “profit taking”. With a Take Profit Order, you secure your profits. A stop order is placed in the direction of the expected market course. So for a purchase order above the current price and for a sales order below. When the price reaches the level, the position is automatically closed