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Entering Trades
Trades can be initiated
in one of three ways: 1) a Market Order, 2) a Stop, and 3) a
Limit.
Market Order.
Placing a market order means that you will buy at your brokers current
"ask" price, or sell at your brokers current "bid"
price, whatever that price currently is. For example, suppose
you are buying EURUSD. The current market, as quoted by your broker
or on GCI's "Dealing Rates" window, is .9152/56. This
means that your broker is willing to buy EURUSD from you at .9152, and
sell it to you at .9156. To place a market order to buy
Click on the rate (Sell or Buy) field
within the order record or right click anywhere within the order record
and then choose Market order command from pop-up menu. The Amount input
screen will appear:
Enter desired amount measured in lots and
press OK. New order marked with letter ‘I’ (Initiate) will appear on
the Trader’s Orders window. Dealer now is able to confirm operation or
to reject it due to market movement.
Stop Order. Initiating a
trade with a stop order means that you will only have a position if the
market moves in the direction you are anticipating. For example, if
USDJPY is currently 128.50 and you believe it will move higher, you could
place a "buy stop" at 128.60. This means that the order
will only be filled if the market moves up to 128.60. The advantage
is that if you are wrong and the market moves straight down, you will not
have bought (because 128.60 will never have been reached). The
disadvantage is that 128.60 is clearly a less attractive rate at which to
buy than 128.50. Initiating a trade with a Stop order is usually
appropriate if you wish to trade only with strong market momentum in a
particular direction.
On the GCI system, you can enter a trade
with a stop order by right-clicking on the appropriate currency rate in
the "Dealing Rates" window, and then selecting "Entry
Stop" from the pop up menu. You can then input the order size
and price.
Limit Order. A Limit order
is an order to buy below the current price, or sell above the current
price. For example, if EURUSD is trading at .9152/56 and you
believe the market will rise, you could place a limit order to buy at
.9145. If filled, this will give you a long position in EURUSD at
.9145, which is 11 pips better than if you had just bought EURUSD with a
market order. The disadvantage of this Limit order is that if EURUSD
moves straight up from .9152/56, your limit at .9145 will never be filled
and you will miss out on the profit opportunity even though your view on
the direction of EURUSD was correct. Entering a
trade with a Limit order is usually appropriate if you believe that the
market will remain in a range before moving in your anticipated direction,
allowing the order to be filled first.
On the GCI system, you can enter a trade
with a limit order by right-clicking on the appropriate currency rate in
the "Dealing Rates" window, and then selecting "Entry
Limit" from the pop up menu. You can then input the order size
and price.
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