Brokerage services
Forex broker facilitate trading
Most of individual traders are using brokerage services to facilitate their trading. Such broker accepts orders from his clients and execute them on market. It is of course not free service. Every broker extend natural bid/ask spread and/or add commission to every trade made by its clients. Currently we are observing heavy competition on brokerage services market so fees and charges are getting smaller and smaller which is good for us, because trading is getting cheaper. It is also good for beginners because to make one's offer more attractive some brokers are giving away bonuses like free trading signals, money bonuses added to accounts, free news services etc.
Rollovers
Interest paid on positions
Each position kept open longer than one trading day generate or deduct interest depending if you are short (selling) or long (buying). You shouldn't ignore these payments or credits as they can extend your profit or limit it. You will find more on this subject on other articles presented on forexscience.com .
Forex market order types
Automating trading
Each brokerage platform has set of orders that can be used to automate trading. Each position should have limits where we want to close it. It helps to defend our capital from too big losses. Here are some of commonly used on forex order types:
Entry order - if currency pair reach wanted price it will open position at this price.
Stop loss order - it is used to close position when it goes against us. This type of order realize loss that we are willing to take when positions turns to be a loser.
Trailing stop loss order - this is the same as stop loss order with important difference, this order is not stable price, it moves after price when it's going good way and stops when it goes against the position. From this reason trailing stop can realize both profits and losses.
OCO orders - OCO stands for one cancels other. These are pairs of orders used both for entry and close positions. Execution of one order automatically cancels other one. This type of orders are used for example when currency pair is in range and we are uncertain which way market will go on breakout. We put then OCO order to sell below range and to buy above it. Breakout will fill one of these orders and cancel the other one.
Limit order - this order is used for realizing profits. Usually it is stable price which when reached closes position.
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