Pending orders have a great significance in Forex trade. It is a type of order in which the trader specifies some conditions that should be met before executing a trade. When you place a pending order, you refuse to accept the current price of a currency. Instead you want to buy or sell the currency when the price of the currency reaches to your specified level.
Pending orders are of two kinds. These are:
- Limit orders
- Stop orders
Developing and following a strategy allows you minimize the emotional and psychological trading pressure. Forex trade is a thrilling career here you need to stay calm in order to earn profit. The popularity of the strategy to deal with pending order is exploding nowadays. The experienced traders as well as newbies in Forex trade are following this strategy as it improves and enhances the trading efficiency of the traders. Let’s view the strategy:
First of all you need to fix a price that matches with our capital. You cannot risk all your capital in a single trade. You will set that price at which you want to buy or sell. You should not place any random price. First thoroughly analyze the current market conditions. Then view the trend, keep on mind the probability of breakdown before setting a price.
Then you need to specify the period of execution of your order. You should set the time till you want the execution of your order.
Next you specify the conditions for stopping the execution of the order.
Take profit order:
Lastly you will select and place the order of taking profit. It basically depends on your ambitions and the current situation of the market. You need to carefully estimate the profit by keeping in mind the chances of the occurrence of reversal.