A take profit order automatically closes an open position once price reaches a predefined favorable level.
A stop loss order automatically closes an open position once price reaches a predefined unfavorable level.
A sell stop order opens a short position only after price confirms downward momentum by breaking below a set level.
A buy stop order opens a long position only after price confirms upward momentum by breaking above a set level.
A sell limit order is a pending order placed above the current market price to open a short position at a better level.
A buy limit order is a pending order placed below the current market price to open a long position at a better level.
Limit order vs stop order compares the two pending order families and when each fits a trading strategy.
A pending order only executes once the market price reaches a level the trader specifies in advance.
A market order executes immediately at the best currently available price, prioritizing speed over an exact level.
Different types of forex orders give traders precise control over when and how a position opens or closes.