An Order is an instruction for transactions at a pre-established price. There are a number of different orders that can be created to fit your interest. By and large, all orders can be grouped into several core types. Orders are chiefly of two types: Stop and Limit.
The Limit (Buy Limit/Sell Limit) order is executed only when the market reaches the price specified in the order or at best price possible. The Buy Limit order is placed below the market, and the Sell Limit order is placed over the market.
The Stop (Buy Stop/Sell Stop) order is executed only when the market reaches the price specified in the order or at the worse price. The Buy Stop order is placed over the market, whereas the Sell Stop order is placed below the market.
By using orders your risk of losses can be mitigated, and a profit can be earned at a pre-established price. The orders are also used for the automatic opening of a new position, when the market reaches a price level specified by a trader. There is only one restriction in placing orders sometimes: they cannot be placed too close to the current price level as they can be immediately triggered.
In addition, in placing orders you should specify maturity:
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The "GTC" (Good Till Cancelled) term is valid until it is executed or cancelled by the client trader.
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The "DAY" term is valid till the end of the current trading session or till midnight of the current business day, and after that it is cancelled without any notice.
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As FOREX is the OTC market functioning around the clock (without trading sessions), Stop and Limit orders are usually GTC orders if not otherwise specified in the broker-client agreement.
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When two "related" OCO (One Cancels Other) orders are placed, the execution of one of them by the broker leads to an immediate cancellation of the other order.
