In forex trading, entry order trading are an invaluable instrument. Trading plans developed by careful planning. But if a trader can’t carry it out successfully, all of their hard work is for naught. Since the forex market is open around-the-clock, no trader can continuously monitor it. Therefore, traders require a method of carrying out our trading strategy that works with their daily schedule.
Setting up forex entry orders becomes important in this situation. Entry orders let traders predetermine the price at which they want to purchase or sell a currency.
This will only carried out if the predetermined price reach. We examine some of the advantages of utilising entry orders while trading forex below.
What is an Entry Order Trading in Forex
An order for a currency pair that is placed at a specific price level known as a forex entry order. The order is then executed or filled when this price is attained. The order won’t be carried out if the price never reaches the targeted price level. Before making a forex order, it is important to consider the many order types that may be available.
Top 5 Reasons to Use Entry Order Trading in Forex
Entry orders’ first advantage is the control they give over price level. Traders can specify the price level they want the trade to open at in order for it to be executed. The option to specify a level makes trading easier because it eliminates the need for regular market monitoring.
An illustration of a deal ticket with the price field highlighted, where a trader can set the level of price execution. Most platforms should use a similar procedure and layout.
Time-saving Entry Orders
Forex entry orders are excellent for reducing wait times. By establishing one, traders can be elsewhere when a trend line is crossed or when a price channel is broken. If price acts as the trader expects, they can very quickly add an entry order to enter the trade. Trading can concentrate on other activities because the order handles the waiting.
Limit and stop orders
Furthermore, traders can manage a trade if the entry order is activated while they are not logged in to the platform by putting conditional stop and limit orders.
This gives comfort in knowing that no deals were executed without management orders attached.
Fill out the “Stop” and “Limit” columns on the deal ticket when making an FX entry order to set this type of transaction.
The entry order must be activated before it opens a trade on our account for stops and limits to become active. It follows that a trader should not be concerned about a stop or limit being struck before an entry order is filled.
Greater Financial Management
Forex entry orders also contribute to cost savings. Think about how much time traders spend trading each day to have a better understanding of this. 12 hours? 6 hours? 1 hour? 10 seconds? Most likely fall in the bottom half of the range between 10 and 1 hour. This is due to the fact that the majority have day jobs, families, or other commitments.
Now we have to compare that period of time to the 24 hour trading day on the currency market. The market is viewed for 0.7% of the day if a trader spends 10 minutes a day placing trades.
A trader is only observing the market for around 4% of the day if they spend an hour a day placing transactions. What are the chances that a trader will be watching the market at the ideal time to actually execute a trade, given this information?
The chances are probably not favorable. The 96% of the time that a trader spends away from the computer is significantly more likely to be the best moment to enter a trade. Traders are likely to receive less-than-ideal entries if they push themselves to trade within this brief viewing window. Trades with sub-optimal entries result in traders losing money.
Even though the optimum price might not be accessible while a trader is physically seated at their computer, they should still attempt to get it. Therefore, entry orders might give the trader the best opportunity to execute at the best price.
Additionally, Forex entry orders with connected stops and limits support the accountability of traders. This is because they guarantee traders are abiding by the rules to the latter and remove the potential of emotions coming in the way of dependable, lucrative trades.
To put this into perspective, each trader should have a strategy and a set of rules in place before they start trading so that they will be prepared for any event and know exactly what to do before it occurs.
But occasionally, emotions (such as greed, fear, or overconfidence) can cause traders to deviate from their predetermined trading strategy, leading them to take unplanned chances in the market in the hopes of “getting lucky” rather than taking a calculated risk where they believe they have an advantage. Entry orders can reduce this risk and ensure that traders stick to their plan.
Trading Support on a Time Frame
Depending on the market being traded, trading on a unique time frame might enable more precise trades that may be in line with impending market news, political events, or company outcomes. The following illustration shows how traders can specify the entry order’s expiry period:
“Good till cancelled” means that the entry order will not be cancelled unless the trader manually deletes it.
“Good till date” indicates that the entry order will be valid until a particular day.
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