Knowing Your Order Types for CFD Trading
You need to be prepared to take responsibility for the financial market trades that you make, whether they are profitable or not. If you don’t know all your types of orders, though, it’s going to be impossible for you to trade with confidence. Once you do know your order types, you can focus all you time on your trading strategy and execution. CFD providers will generally offer you a wide selection of order types, which enable you to much more easily execute your trading strategies.
A market order enables you to enter at the current price.
A limit order enables you to place an order to buy (or sell) at a lower (or higher) price than the market is currently trading at. Traders may use these types of orders when they are waiting for prices to move close to a support or resistance level before entering the market.
A stop order allows you to close a position below the current market price and is the primary means traders use to manage risk on each position that they take out.
Other order types include if-done orders and one cancels other orders. The types of orders available will depend on the provider that you use, but generally these more advanced orders enable you to link different order types together to execute more of your strategy in one go.