Stock Market

There are generally three types of orders that can be used when placing trades. These are market orders, stop orders and limit orders. They are variations on each to which traders should be aware of. These variations are present for security and precision and there are occasions where more then a single order is required.

Market Order – Basic Trade
A market order is where a trader purchases or sells their security at the best market price available. There are two variations on the market order. The Market on Open Order means that the trade must be done during the opening range of trading prices. So the highest price for selling and lowest price for buying.

The Market on Close order is done within minutes of the market closing. This is done at whatever price is available at the time.

Limit Order – Buying at a Lower Price/Selling at a Higher Price
Limit orders involve setting the entry or exit price and then aiming to buy below the limit or sell above it. You can set two conditions on this, one is “Good for A Day” and the other is “Good till Cancelled.” Both of which are self-explanatory. They of course can be changed any time before execution. Reaching these limits/targets is not always possible and sometimes the orders do not go through. Limit orders are very common for online traders.

Stop Orders
Stop orders are used for both opening and closing positions. They are the opposite of Limit Orders. In a limit order the case was that when a price rose to a certain level a sell order was given, in this case a buy signal is given and vice-versa for when the price drops. In the case of a sell stop, it is done so buyers can cut their losses when a share price falls too low. A “Buy stop” is more common and is put into place if the share price is predicted to break through its peak level and head to a new high.

There are down sides and risks associated with both types of stop orders though and should be made with careful scrutiny. Traders should be sure their technical analysis are correct in predicting breakthroughs in share prices in the risk of buying high and selling low.

Traders can also use “guaranteed stops” to protect their position. This is a stop guaranteed by the broker and is ideal if the share takes a sharp sudden turn.

The variations in the three orders require traders to be well aware of their options when trading. Studying the stock and predicting the trend accurately is very important. Stop buys are ideal for securities you expect to break through upwards. Stop sells are for shaky markets that may turn any time. Limit orders are for conservative stocks that are fluctuating.

Foreign Exchange Markets

The basics of foreign exchange markets states that you need to always be working for profits. This is what the whole system is based on. Every single trader out there is looking for profits and that is what drives the system. I went for the longest time without making a penny in profit, but I kept working hard to learn and grow. That day did come and I was very happy. You have to do the same thing and my advice should help you.

Demos

The demo account you get with your broker is an excellent tool for learning the proper behavior for trading. The problem is that people think it's a tool to test out their next get rich quick strategy and get upset when it doesn't work. That's not what a demo is for. It's to help you work on those routines and things you do to find profitable trades. It teaches you develop instincts about trading that you wouldn't get by reading a book on forex.

Don't trade for the wrong reasons

You have to watch out what you're thinking of when you trade. There is so many thoughts going through your head and a lot of them are emotionally based. A gut feeling may feel like the best move in the world, but if it isn't based of fact, reality and evidence than you're just gambling with your money.

Forex Currency Trading

So you're looking to start trading currency to make some money. Well you're in luck because I've been doing it for a few years and I've had some of the worst luck at it. But with any bad experience, you learn a lot from it, so I'm going to pass that on to you.

Cutting your losses is the single most important thing you can do to sustain profit. A lot of people that aren't good a trading assume they're no good at making profits. We can all make profits, the problem is that our losses end up taking more money away than we make. You have to reverse that trend, but getting out these losses. Salvage as much of the initial investment as you can, than reinvest it in a better trade.

There is also a proper time to trade. I bet you never heard anyone say that before. People will go on and on about how you can trade 24hrs a day. Well, you can actually do that, it's just not the smartest thing. If you take a look at late nights, very little people are trading. When the few people that are actually there start to move money around, it has a more profound effect on the direction, especially when the traders are big. This means you're at the mercy of people with big money. Stick with the busy times and things will be much more stable.