Gold Trading Orders
There are different types of Gold trading orders which a trader can use to trade Gold.
To trade Gold successfully a trader need to learn about the different trading orders that are used when it comes to trading Gold. A trader must learn each type of order so that they can use it for its correct purpose. The most important thing to remember is that you must understand the orders that you place when trading Gold, and never place an order that you are not familiar with.
Below is a list of basic definitions of the orders that are commonly placed in the market when trading Gold metal online.
Market order is the most basic order that is used to trade gold. This order is used to buy or sell at the current bid or ask quote. This is the price that is currently appearing on your trading platform.
This order is used for buying and selling according to the present price that is quoted. The execution of this order is instant - the minute that as a trade you want to buy or sell you can use this order to enter a trade by buying or selling at the current market price at the click of a button.
These orders are used to open a new trade after the market price has reached a price specified by the trader.
These orders are used to buy or sell Gold when the price of Gold attains a certain price target - after which when this price is attained then the entry order gets executed.
These orders are used to enter a trade at a specified price level. Because sometimes a trader may not have the time to monitor the market all the time then a trader will set these entry orders so that when a particular price level is reached then the specified order will be executed automatically and a buy or a sell trade will be opened.
If a trader feels that the market will go in a particular direction - such as the current trend continues moving in the same direction or analyzes that the support or resistance level of Gold will hold, then the trader has the option of using these entry orders to specify which trade is to be opened and at what price the trade is to be opened.
These orders are also known as pending orders because they do not get executed immediately but are kept pending until the price of Gold attains a specified price.
There are two categories of entry orders, these are:
- Entry Limit
- Entry Stop
An order to buy or sell Gold at a particular limit.
The limit can either be below or above the current price.
- A limit that is below the current price is used for buying
- A limit that is above the current rice is used for selling
These orders are placed by traders when they expect the market to bounce back after reaching the level at which the entry limit was placed.
Buy Limit Order
Order specifying to buy at a level that is below the current market price.
This order is set by a trader who wants to buy Gold, but does not want to buy at the current price but wants to wait until Gold hits a support level - and buy the Gold once price hits this support level. To do this a trader will set the Buy Limit Order at this Support Level that is below the price.
This order will be executed once price fall to the buy entry limit level.
Sell Limit Order
Order specifying to sell at a level that is above the current market price.
This order is set by a trader who wants to sell Gold, but does not want to sell at the current price but wants to wait until Gold hits a resistance level - and sell the Gold once price hits this resistance level. To do this a trader will set the Sell Limit Order at this Resistance Level that is above the current price.
This order will be executed once price rises to the sell entry limit level.
An order to buy above the current price that is continuing to move upwards or sell below the current price that is continuing to move downwards.
This orders are set when a traders feels that the current trend is going to continue, but the traders want to buy at a higher price maybe after a price breakout or sell at a lower price after a price breakout.
Buy Stop Order
Specifies to buy Gold at a level above the current market price.
When buying this order is executed as the market goes up and hits the buy stop entry level.
Sell Stop Order
Specifies to sell Gold at a level below the current market price.
When selling this order is executed as the market goes down and hits the sell stop entry level.
These orders are also used to trade the market when there is a consolidation pattern. A trader will place an order to buy above the consolidation pattern and also another order to sell below the consolidation pattern.
In the next tutorials we shall look at how to set these Entry Limit and Entry Stop Orders when trading Gold online.