Successful Forex Trading: Mastering Buy and Sell Orders Is the Key

Want to generate stable profits from the forex market, the first thing is not to learn technical analysis or follow news, but to understand the different types of trading orders. Many new traders lose money because they place the wrong order type or at the wrong time. Today, we will delve into buy and sell orders in forex trading, from basic to advanced.

What Is a Trading Order? Why Is It Important?

In the Forex market, an order is a tool that helps you execute your trading idea. Each type of order serves a specific strategy. If you do not know how to properly use each order type, you may enter trades at the wrong time or incur unnecessary stop-outs. Therefore, mastering buy and sell orders is a fundamental but extremely important step.

Market Order - When You Need to Enter Immediately

Market Order is an order executed instantly at the current price displayed on the screen. When you click Buy or Sell, the order will match at that moment’s price.

Specifically, for the current EUR/USD pair:

• Bid Price (buy price from trader): 1.32211
• Ask Price (sell price to trader): 1.32366

Then:

• A buy order will match with the Ask price = 1.32366
• A sell order will match with the Bid price = 1.32211

When to use? This order is suitable for scalpers and day traders. The advantage is quick entry, but the risk is that you cannot control the exact entry price.

Pending Orders - Pre-placing Orders to Avoid Watching Charts

If you don’t want to constantly monitor prices, you can use Pending Orders - pre-set orders at specific price levels.

Buy Limit & Sell Limit - Buy Low, Sell High

• Sell Limit: Set to sell at a higher price than the current market. The order automatically executes when the price reaches the target.

Example: EUR/USD is currently at 1.2432. You predict the price will rise to 1.25 then fall. You place a Sell Limit at 1.25. When the price hits 1.25, the order automatically sells.

• Buy Limit: Conversely, set to buy at a lower price than the current market.

Example: If you predict EUR/USD will decrease to 1.23 then rise, you place a Buy Limit at 1.23 to buy in.

Buy Stop & Sell Stop - Catching Uptrend or Downtrend

• Buy Stop: Set to buy at a higher price than the current market. When the price rises to your specified level, the order automatically triggers.

Example: EUR/USD is at 1.2323 and trending upward. You predict that when the price reaches 1.24, it will continue to rise. Instead of watching, you place a Buy Stop at 1.24 and do other things. When the price hits 1.24, the buy order executes.

• Sell Stop: Set to sell at a lower price, following a downtrend.

Risk Management Orders - Protect Your Account

Any buy or sell order should be accompanied by protective orders.

Take Profit (TP) - Automatic Exit to Lock in Profits

This order helps you exit when your desired profit is reached.

• When buying, TP is a Sell Limit
• When selling, TP is a Buy Limit

Example: You buy EUR/USD at 1.2345, expecting it to rise to 1.24. You set TP at 1.24. When the price hits 1.24, the order automatically sells with profit = 1.24 - 1.2345 = 55 pips.

Stop Loss (SL) - Cut Loss When Wrong Prediction

This is the trader’s “lifesaver.” If the price moves against your position, SL automatically exits to limit losses.

• When buying, SL is a Sell Stop
• When selling, SL is a Buy Stop

Example: You buy EUR/USD at 1.2345, but to hedge against miscalculations, you set SL at 1.23. If the price drops to 1.23, the order automatically sells, losing = 1.2345 - 1.23 = 45 pips instead of over 100 pips.

Important note: Professional traders always set SL for every order. This helps preserve capital and continue participating in the market long-term.

Trailing Stop - For Experienced Traders

This is a “smart” stop-loss order that automatically moves with the price. For example: You sell USD/JPY at 88.80 with a trailing stop of 20 pips.

• Initially, SL is at 89.00
• If the price drops to 88.60, SL automatically moves down to 88.80
• If it continues to fall to 88.40, SL moves down to 88.60

Trading continues as long as the price does not deviate more than 20 pips from the lowest point reached.

Warning: This type of order is difficult to control and only suitable for experienced traders. Beginners should absolutely avoid using it.

How to Place Buy and Sell Orders on Trading Platforms

On MT4/MT5 Platforms (Most Common)

Step 1: Select “New Order” to open the trading window. Enter the trading volume. For a $1000 account, only set 0.01 lots to ensure safety.

Step 2: Choose order type:

• “Market Order” for immediate entry
• “Pending Order” for pre-setting

Step 3: Set TP, SL, then click Buy/Sell.

Step 4: To close the order, right-click on the open position and select “Close.”

On Other Platforms

The process is similar but with different interfaces. You can:

• Analyze technical charts
• Set all order parameters in one window
• Click Buy/Sell to execute

Tips for Effective Order Placement

1. Always set Stop Loss - Never place an order without SL, even as a professional trader
2. Calculate Risk/Reward beforehand - Expected profit should be 2-3 times the maximum loss
3. Avoid “watching the price” - Use Pending Orders to prevent impulsive decisions
4. Control position size - Don’t set too large relative to your capital
5. Understand each order type thoroughly - Before using complex orders like Trailing Stop, practice extensively

Conclusion

Successful forex trading starts with mastering buy and sell orders. Understanding how to use Market Orders, Pending Orders, Take Profit, and Stop Loss will help you better control risks and increase profit opportunities. Don’t rush into placing orders without a plan—always prepare carefully, pre-set TP/SL levels, and start with small volumes to learn.