Trading process consists of two major steps Order opening and Order closing. With the help of the forex technical analysis and the online forex broker, the journey of the trading process begins. The forex technical analysis gives the required information about the market and helps to decide on the trade. The online forex broker assists in completing the transaction. As stated earlier, trading process starts with Order opening.
The term is self-explanatory; it is the first step towards completing the transaction. Order opening can happen live, when the person is online and in front of the device called as Market order.
If the order opening is planned previously and set for a particular parameter for its execution wherein the person does not need to be in front of the device is called Pending Order. The pending order gets executed when the price reaches the desired price level.
The Market orders opens positions in current time, while the pending order opens positions when certain conditions are set. The conditions could be Buy Limit, Buy Stop, Sell Limit or Sell stop.
The importance of forex technical analysis is especially seen in the pending order, as the order is placed based on what you forecast over a period of time. If the forex technical analysis is well studied and understood, the chances of making a good transaction is high. The importance of the forex brokers comes in during the actual execution of the order; the online forex broker helps in reducing the chance of slippage.
The process of trading is not complete without the closure of the order. Closing order again can be completed either by Stop Loss or Take Profit. Stop loss is as the term suggests a step taken to close the order when the trade is moving towards unprofitable positions. The stop loss happens immediately and automatically, without the requirement of the trader being physically available in front of the computer.
The Take Profit step is given to complete the order when a particular price level is reached. Here again, the setting of the Take profit based on the forex technical analysis and an ability to predict the movement of the market. The Take profit is a limiting order which occurs automatically and as in the Stop Loss, there is no requirement for the trader to be available in front of the system.
As the quote goes “something that is open can only be closed”, similarly only open market orders or pending orders can be closed. The Stop loss order is immediate order closure execution. As soon as the orders are closed, the account history will be updated with the last available order open as well as closed.
As is the basis of the complete online forex trading process, the forex technical analysis is very important to decide the order opening as well as the order closing, the right prediction of the market along with efficient forex broker will invariable help in making a profit utilizing the trading process.