Trading Platforms and Order Types

Getting involved in the foreign exchange or Forex has become extremely popular with investors in recent years. As more investors look to diversify their investments away from traditional securities, many are getting into foreign currencies. One of the issues that many new investors face is figuring out how to use their trading platforms and learning all of the terminology that comes with it. Here are the basics of what you need to know about platforms and the different types of orders you can place.

Charts

One of the main components of the trading platform is the charts. For each currency pair that you can trade, you have access to charts of the price history of that pair. You can change the time frame of the chart, depending on what information you want. You can pick time frames like one minute, five minutes, one hour, one day, or even a month.

Price Quotes

On most platforms, you can also see the price quotes for all of the currency pairs that are available. Typically, up in the top left corner of the platform, you can see a bid price and an ask price for each currency.

Account Information

Near the bottom of your platform, you can also find information about your account. You should be able to see your account balance, as well as how much available margin you have to trade. You can see what open positions you have, as well as your account history.

Limit Order

A limit order is a type of order that you can place on your trading platform. With this type of order, you agree to buy or sell a currency pair once it hits a certain price threshold. This is a type of pending order that makes it possible to speculate on what the currency pair will do without actually buying or selling it yet.

Stop Loss

After you are in an open trade, you can also place a stop loss order. With a stop loss order, you specify how far in the hole you are willing to go if the trade goes against you. This makes it easier to manage your account balance. If you have to leave your platform, you can make sure that your trade will close out if the market moves in the opposite direction of what you expected.

Take Profit

On the other side of the spectrum, you can also place a take profit order. Once you're in a trade, you can specify at what price you want to close out the trade in profit. This helps ensure that you get what you hoped for out of a trade if the market moves in your direction.

Play around with your trading platform and get comfortable with it. The more comfortable you are, the better you'll perform when trading.

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