Hedging Forex trading

In the last lesson we just mentioned hedging about swaps. Hedging in Forex is a corrective operation in order to repair the wrong operations. In fact, it is normal that you are mistaken, even when negotiating on the currency market, but it is also normal and important that there are corrective maneuvers in order to reduce the losses resulting from the same mistakes. In our course we have already talked about the stops, that is the stop loss and operational that allow the trader to repair in case the prices fall or rise too quickly against their positions and therefore does not have time to close the positions in a manua way The.

Now let’s look at the possible loss from a very interesting and intelligent point of view: How much is the loss affecting our capital? It remains firm that it is important to defend the entire capital, or to our initial capital to which we add the gains made. Smarter still is reasoning in these terms:

“If my losses are 10% but I have revenues that satisfy me, I’ll just have to try to stay within this 10%”.

It is clever since losing is not only possible and humane, but also inevitable. This concept you must always keep it in your head. Even smarter is to reduce this percentage in the event that the gains increase, since although the percentage remains the same this will continue to churs out ever higher values. It will have to be phased out, but it will always remain a certain percentage of loss. It’s a normal thing. If you do not lose anything, rather, worry because you are probably dreaming or you are hurting the accounts.

By maintaining a predetermined drop of losses, such as this 10%, we will be able to devote ourselves more calmly to planning defensive strategies without closing the positions (leave it as a last chance!).

When you keep different positions open in fact one thing that is done very often is to close those that do not go, without giving them the opportunity to evolve. We close and go, we start with another one hoping it will get better. In fact, every operation, every open position should be cured at best, as if it were a plant, to make it become a tree. If the plant starts to grow crooked, it is not to be thrown, but it can be applied of protections like for example the rods of bamboo in order to make it grow straight, in the right direction. Well, that’s what hedging proposes. Market fluctuations are physiological, so some deviation from the right direction can be possible. In fact, it’s physiological too. All the more so, when that happens, we must not always put the responsibility on ourselves by saying ‘ I have the wrong direction ‘, but simply wait and see if this choice has proved to be really wrong or, on the contrary, exact.

So, if we are convinced that a trend is right, let us not demoralise the first negative signals. Obviously, the opposite case is also wrong, that is to remain too much on a wrong position, continuing to limestone on the margin call. In any way, you will understand for yourself what the difference is. It’s really glaring.

Keeping the position and waiting, without hastily closing the position
By filing stop loss and operating
Closing part of the open positions (if possible) or opening opposite positions to those initiated (if possible)
The “if possible” is obviously due to the type of broker and the platform that you use. With Plus500 you have the opportunity to do both, so we advise you to consider if you do not already have an account with another broker.

With some brokers it may happen that if you open a purchase position and then open a sell position on the same currency pair, the two positions are compensated and therefore the difference remains active. In case of the same volume, the previous is closed and the new one kept open. In case of different volumes (e.g. purchase 10, Sale 25) The previous is closed and the new is kept open for the difference (15). In practice, in this case the platform considers an opening of opposite direction as a closure of the previous or part of it.

Opposing and open positions
If instead the Forex platform allows you to keep two positions open in opposite directions, then you can evaluate:

Correlation between currencies in Forex

The correlation between currencies is the ratio between the price trends of the same, so when we talk about cross-currency correlation we mean the same thing, only that applies to couples rather than to individual currencies. The correlation becomes important when you want to invest in Forex taking into account more than one currency pair, with the intent to consider the reciprocal reactions that are created between two or more elements taken into account. In technical jargon, we talk about operativity. When we want to consider the operation on two or three cross at the same time we must consider several factors including the correlations between them. We point out that for elements we mean currency pairs and also that it is advisable not to study the correlations between more than three currency pairs for the same purpose. For example, an account is to study the correlations between EUR/USD, USD/JPY and EUR/JPY, an account is to study the correlations between these and others with GBP. It’s getting a little bit too complicated so we recommend staying in the “triangle” of type AB, BC, AC.

Correlations between the same cross
Cross Price trend
In This lesson we will deepen the first point. As for the rollover, we have already analyzed it before but we briefly repeat that it is a daily shot that allows you to receive prizes in positive and negative for maintaining the position. The trend of cross prices is almost discounted, but it is always good to never leave anything to chance and reiterate the most important concepts.

Cross trend
Now be careful because as we said before you can take for granted aspects that affect individual cross currency. The characteristics that influence the trend of the individual cross vary from couple to couple, so you must always keep them in mind, especially when you prepare to make a correlation.

For example, cross trends can be influenced by the economic conditions of the countries in which they are made up, by carry trade operations, by the diversity of markets they present, by transaction volumes and by others. Each of these elements can influence and also very much the single currency. Let’s see them a little closer.

The carry trade is a financial transaction with which you are supplying funds in a country with a low cost of money (low interest rate) and you use these funds in a country with a high interest rate. For example, if we borrowed yen and paid 1% (low), we could convert them to AUD (Australian dollars) which makes 7-8%. The operation is very convenient but presents a risk due to the change. If before the expiration of our speculative operation in Australia the Yen reevaluates for more than the difference in yield, the transaction becomes at a loss. The carry trade however tends to depress the yen change, as it involves the sale of yen against other currencies, thus exalting the convenience of the operation. The operation of carry trade in any way is done only when the markets are favorable for the assumption of the risk just mentioned.
The diversity of the markets is due to the different import, export and production strategies due to the type of raw materials you have, the type of products and the internal and external demand.
The strategy
The correlation, simply summarizing, is trading on multiple currency pairs at the same time. For this reason, it is necessary to follow the individual currencies more closely, then the currency pairs that include them. The correlation is made to contrast the different differences between the various elements, as well as to emphasize the common points for example of the effects on the basis of the same causants. In practice, it is a question of understanding how currency pairs behave in the presence of certain conditions, such as those of the market affecting both reference markets, as they respond to the currency of the couple so Like the others. The best strategy is to work with at least three cross-versions of which two are directly or inversally related (also considered rollover rates) and a third to cover set on a positive rollover operation. We refer you to the first part of the article in which we considered price trends and rollovers. These two are necessary elements for the study of currency pairs and in the planning of an investment based on the correlation between currencies in Forex.

Daily changes and operation

To be fully operational in Forex it is necessary to assess all variations of the daily information that may affect the currency market. At this point, we refer to everything that we have written about the indicators in Lesson 18 and lesson 19 to find out what are the elements to consider when evaluating an investment on a given currency pair. In short, there are factors called economic indicators (GDP, consumption, incomes, imports, exports, employment, interest rates, etc.) which are the thermometer of the economy of a given country and therefore also of its currency (USD for the USA) or of Currency of membership (EUR for Italy).

The data concerning these indicators can be recovered both from the specialized newspapers but above all and in a better way from the network, from the specialized sites like the Sole24Ore, Yahoo Finance, Bloomberg within Repubblica.it etc. Every source is fine provided it is accurate, updated costanetemente and reliably.

The daily variations however can be of other type in addition to the macroeconomic one. In fact, every day we need to have at least 4 factors, including:

Graphs with relevant indicators
Possible macroeconomic data publication (which we have seen)
News and comments

For news it means all the news that can be obtained apart from the publication of the macroeconomic data. In fact, one thing is a datum, one thing is an event. For example, if a government falls or is about to fall, this information does not represent a macroeconomic figure, but it will certainly negatively affect the currency of reference. Obviously, when the currency covers more countries, such as for example for Europe, this event has less influence than it would have in a country like Russia, with its own currency.

The comments, however, are the opinions of experts in economics and finance on anything: macroeconomic data, events of various kinds etc. We all have some financial experts who transmit US security or trust us, or we believe in brilliance or geniality. The comments help to reinforce our ideas. Choose your favorite commentators well.

The analysis or the simple reading of the graphs must be for a trader like the alarm clock in the morning: an operation to be done always, with constancy and dedication. In addition to the reading of the rises and the downs, the times of the peaks etc. It is necessary to keep in mind also the data of the graphic functions which can be set up through the platform (e.g. moving average, crocodile, Bollinger bands etc.).

Prices are the first thing you look at when you open a position, when you invest, when you buy or sell. The price is the starting point, but it is also an object of evaluation. The bid price, the Ask price, the percentage change of the previous day, the minimum peak, the maximum peak. These are all factors that can be easily controlled on the same trading platform.

The difference between bid (sales) and ask (purchase) is important not only to check which progress has been made in relation to your position opening, but also for the spread, the difference between the bid and ask prices. If, for example, you are traders who are constantly searching for new products to negotiate with, then the difference between bid and ask (spread) is very important because it changes from product to product and represents the broker’s earn.
The minimum and maximum quotation peaks of the previous day or the same day are often taken into account as this can take into account whether there is still room in the movement of a trend or at least the probability that this fluctuation in a clean Born way.
The percentage variation measures the difference between the opening and current prices, so it can be positive or negative. Positive if the price saw a upside, negative if it saw a downside. Remember that with regard to currencies, the share that you see is relative to the amount of money in the denominator that is needed to buy the unit of Monage in the numerator. Thus, if the EUR/USD quota 1.25 means that it takes 1.25 dollars to buy 1 euro.

Interpreting economic indicators

So far we have seen what the economic indicators are and what relations they have with the financial markets. In This lesson, we will see how the indicators influence each other and see what the growth and degrowth factors of a country are, essential elements to predict the movements of the currency of reference and therefore its strength in a Certain currency pair.

Interest rate
The first economic indicator of which we analyse the effects is the interest rate because we will meet it in the presentation of the effects of all the other indicators. The interest rate is definitely the variable that has the biggest impact on the Forex market, so on the equity and bond markets. It can be said that everything moves based on rates, their trends and even their predictions. Sometimes the markets are based so much on the forecasts or the announcements of a rate change, that when this actually arrives, it now does no more effect since the markets have already adapted to the waiting.

On the currency market or on Forex, an increase in real interest rates (i.e. net of inflation) sees an increase in capital attraction due to higher yields. This factor should in theory reinforce the currency within the ratio of currency pairs.

GDP (gross domestic product)
We start from GDP, that is gross domestic product or GDP. A high GDP usually follows interest rate rises or at least the upward expectations of interest rates. In fact, being a positive factor, this causes the state to increase the rates to reinforce its own currency. This, unless the State itself does not issue that an inflation does not bring damage to the confidence towards the same currency. For example, if Japan has an increase in its GDP and decides to increase interest rates, the YEN will be worth more, but it will cost more even for those who buy from abroad where the exchange rate is strengthened in favour of the yen. Therefore, if the increase in inflation affect the welfare of the country, the state will not raise interest rates or bring them back to the previous level shortly.

Countries that are interested in attracting capital are in the interest of low inflation. Therefore, even if they have high GDP, they are not interested in raising interest rates and therefore do not have large changes in currency ratios, i.e. in currency pairs.

Some indicators are able to anticipate the future evolution of GDP, as this depends on the evolution of aggregate demand. According to the macroeconomic model, considering GDP as an offer, demand is made up of consumption, investment, stock variation and net export. Therefore, by analyzing the components of demand, one can come to indicate the possible evolution of GDP. Basically, it is what the analysts ‘ predictions are based on to predict the variation in the percentages of GDP at a time in the future. One often hears say for example “in 2015 GDP will grow by 0.1%” (usually when we speak of Italy is always a matter of very little), well now you know on what factors are based those predictions.

Industrial production
Industrial or industrial production is usually published together with the utilization rate of production capacity. If this rate exceeds 85%, it can lead to large inflationary imbalances in the production process.

Retail sales
A growth in retail sales or retail sales is a strengthening, so as in the case of GDP you can expect an increase in rates, so you can bet on the strengthening of a currency in a monetary couple and then be able to bet upward or Downward accordingly.

Order durable goods
If the orders of durable goods or durable goods orders grow it is a sign of strengthening the economy so even in this case we can foresee a rise in rates.

Orders to industry
If orders grow to industry or factory order it means that the potential productivity of companies grows and therefore also their profits. Factor that is needed to assess whether in the near future there will be a downturn in the economy or not. Obviously, if orders increase, this decline will not be there, but indeed there will be a strengthening of companies and equity indices.

Guide to Forex indicators

In This article we will start the path for a guide to Forex indicators, to make you enjoy the best information on the net. In the last lessons we have seen what the economic indicators are and how they can influence the price in the markets of the currencies to which they refer. However, it should be considered that those mentioned by us are only some of the most important indicators that are taken into account in the fundamental analysis. Every day many economic indicators are published by Governments, rating agencies, economic entities of various kinds. As we have already mentioned, these data in addition to being a budget of the moment, represent a real state of health of the economy taken into account. In This case we refer to the economy of a single country or of a community of countries (e.g. EU). The data, thus obtained, are also called fundamental, so remember that behind this term there are macroeconomic indicators such as those we have seen in past lessons (GDP, unemployment, inflation, interest rates, consumption, etc.).

Index [Hide]

1 Data relating
2 The Consensus
3 Finding Consensus Data
The data of the economic indicators can be divided into two main categories: absolute data and relative data. While the absolute data refer to a given period and that is enough, the relative data compares more periods. For example, comparisons may occur between second-quarter and first-quarter data, as well as first-quarter 2014 data comparisons, with the first quarter 2013. Of course, as well as quarter you can talk about semesters, months, etc.

The Consensus
You hear little talk of this term but it happens more often than expected, only that you drop it in oblivion after two seconds because you forget to go to check what it means on Wikipedia or on the vocabulary. However, the consensus on economic indicators is very important, as it represents the expected data from analysts. Usually it is called with a term much more understandable as “expected value” of analysts, however sometimes in some economic insights is called by its technical name, remaining so understandable only to the insiders.

Well, consensus is not just a prediction, but it takes a lot of importance because analysts ‘ predictions influence the market, sometimes decisively. For example, if a rating agency expects that GDP for Japan will have a negative variation of 1 percentage point, almost certainly investors will start to move as a result and therefore there are also effects on the Forex market.

Finding Consensus Data
A good trader must also be able to make good use of the Internet, linking to the sites that offer consensus data as well as official data for the fundamentals. On the Internet you can have information about exact dates and times in which certain information is released, or published. These are communications that may take place via bulletin published by an official website (e.g. Government agency or credit rating agencies in the event of a consensus) or through a press conference. On our website we will soon provide you with sources for economic indicators and consensus.

Impact of economic indicators on Forex

In This article we will see what are the impacts of the elements at the base of the economic indicators on Forex or the currency market. This is fundamental information that every good trader should know so if you are practicing for the first few times, keep in mind what we will propose in this lesson. Before you list some of the most important indicators and their impacts on the markets, you need to offer some indication for reading. Keep in mind that:

The indicators refer to macro-economic elements and we will examine them in relation to the various financial markets
A positive relationship is given when an increase in the macro indicator follows a rise in market quotation
A negative relationship is given when an increase in the macro indicator follows a downside in the market quotation
A strong report indicates that the market change is very likely when there is a variation of the indicator
A weak relationship indicates that the market change is more uncertain (less likely) when there is a variation of the indicator
Now, as you can see, this is a really interesting and compelling topic, because now you will begin to understand when and why markets follow certain macroeconomic events.


Indicator reports/Forex market
So let’s see together what happens for the currency market, or Forex.

GDP: positive – weak
Unemployment: Negative – weak
Inflation: Negative – strong
Interest rates: positive – strong
Well, following the directions given in the first part of the article, we find that while the data of GDP and unemployment have a fairly uncertain relevance, inflation data and interest rates have a strong relevance because it is very likely that To a variation of these indicators follow a variation of the market. We will say that the report of GDP and unemployment with the forex market are weak relations, while the relationship of inflation and the interest rate with the forex market are strong relations.

If GDP increases, there is a probability though uncertain that it should also increase the value of the reference currency.

If unemployment increases, there is a probability though uncertain that it should decrease the value of the reference currency.

In the case of inflation the report is of a negative-strong nature, so it means that when inflation increases, the market value of the reference currency decreases. That is, making an example, if inflation rises in the euro area, the euro will most likely descend in value.

In the case of interest rates, however, the report is of a positive nature, i.e. if interest rates go up, the value of the reference currency will also rise. Therefore, if the ECB raises the rates, the value of the euro will probably also rise.

While in the Forex market there are also many weak relationships, in other markets such as bond and equity, most relationships are strong.

Fundamental analysis in Forex

In the last lesson we have seen what fundamental analysis consists of and we have pointed out how this permeate everyday life and how we can see its effects. In this lesson we will see specifically what are the factors that are taken into account in the fundamental analysis, which are the economic indicators of a given context. We consider it appropriate to provide both the Italian and the English words, as those of you who are more likely to go into the study could find some initial difficulties in the correct translation of some items. Well, here’s the economic indicators most considered for the fundamental analysis in Forex:

GDP or gross domestic product – GDP
Industrial Manufacturing-Industrial production
Durable goods orders
Retail sales-Retail sales
Company Stocks – Business Inventories
Wholesalers Stocks-Wholesale Trade
Industry Orders
Household incomes – Personal income
Consumption expenses – PCE or personal spending, personal consuptione Expenditure or personal Expenditure
Unemployment rate – Unemployment rate
Trade balance
Interest rate or reference rate
As you can easily see, these are terms that are heard every day in the economic insights of the news, or that they are very newsworthy in the opening. The data of GDP, are certainly the most resonant, as well as the unemployment rate and the income of households.

Index [Hide]

1 interest rates, crucial for currencies
2 The welfare of the economy
3 Euro versus dollar, the infinite Challenge
Interest rates, which are crucial for currencies
We have stressed several times that there are some important decisions that when they are announced they influence and not just the trend of currency prices. One of the economic indicators to be taken more into account for this is the interest rate. In fact, think of a conference where the President of the ECB or the FED announcements the cutting of interest rates. This type of announcement always has immediate effects on the cross currency of reference so it is always good to take advantage of it, or close the positions that can become dangerous.

The well-being of the economy
All the economic indicators listed above go to play an important role on what we can define as the well-being of a given economy. An economy that presents positive assessments on all these factors is definitely a healthy economy. Now: it will be simple but not trivial to specify that so much an economy is good, it is solid, more will be well and solid that currency. For this reason, we advise you to always keep as a reference and as a product to invest in, the American dollar. The United States is certainly the strongest and most stable economy in the world, with potential always around the corner, fueled by a mobility both in work and in the flow of investment.

Euro versus dollar, the infinite Challenge
Since the euro exists, the EUR/USD has always been the most traded currency pair and the reasons are many. The most important is the relative ease compared to the other couples, to predict its movements, especially the more excessive ones, precisely linked to the ads above. This pair therefore looks great both to start and to continue a trading activity on Forex.

forex trading Economic indicators

To negotiate on the Forex and more generally to operate on the financial markets it is necessary to have at least a general smattering on the concepts related to the economy. It is true, to negotiate on binary options you can also follow only the signals of the appropriate software, but to optimize its activity, its efforts and get more gains is well and even advised a deepening in economic matters. In This portal we will not offer you an entire university course of economics or finance, but we will give you seeds that you will be free to plant to get good fruit. In This lesson we will discuss so-called economic indicators, the so-called fundamentals. Have you ever heard of fundamental analysis? Below we will give some hints.

1 fundamental analysis, what is it?
2 Everyday life
3 The Rumour
Fundamental analysis, what is it?
Although the name may be frightening, we assure you that this is a very fascinating topic. If you let yourself be overwhelmed (positively) by the dynamics of fundamental analysis, you will be able to find more and more passion for forex trading.

So let’s first see what it is.

The fundamental analysis, together with the “technical” analysis (which we will discuss later in the course), is the study aimed at designating the “fair price” of a stock, taking into account the economic and financial aspects to which it refers.

Well, if for actions the fundamental analysis takes into account some aspects such as capitalisation, budgets and so on, in Forex the fundamental analysis takes into account different factors, that is, macroeconomic factors that can have an impact on a Particular country or community associated with a particular currency.

Everyday life
The factors taken into account for fundamental analysis in Forex are visible in everyday life. They can be seen in the economy, in house prices, in consumer prices, in the work that is missing. We can follow the news and have an idea about how the economy influences and manifests itself on the lives of all of us, and how it is practically impossible not to follow it. And here we present another optics: follow it to optimize your earnings. Not only from the news, but also from the specialized newspapers like the sun 24 hours online or by Bloomberg of Republic. These are just examples: you can use the sources you want as long as they are continuously updated and reliable. The upgrade, in trading, is crucial. The best results are obtained by taking advantage of the news and opening or closing positions accordingly. For example, if Dragons announces a cut in interest rates, this will certainly affect exchange ratios with the EUR.

However it is not only the large organisms to influence the choices for Forex, but also the individual states, such as these days you have for the Jobs Act. The evaluations concerning the contractual conditions of the workers influence the savings and thus the consumption. The latter are fundamental to the macroeconomic well-being of a country, as they affect investment, therefore on employment and still on GDP.

The rumour
In addition to the real facts, the fundamental analysis can also be made of particular considerations, which refer to the so-called “rumour”, or unofficial voices. These hints, which can sometimes be even simple predictions, often affect the trend of the titles and therefore the fundamental analysis could take it into account to make certain corrections.

In the next lesson we will see what are the factors taken into account in the fundamental analyses in Forex.

Scalping in Forex, what is it?

In trading on online Forex is referred to scalping to define a close operation of a position in very tight times, a feature that makes this practice even more interesting and exclusive, especially if you compare it to normal Possible procedures with the investment by bank. We have seen that on Forex you can negotiate only through the brokerage of a broker, or a brokerage company (in fact) that instead has the authorization to be able to act directly with purchases and sales of financial products. In this series of lessons we refer to Forex, but the practice of scalping is possible in all the specialties of online trading and is the daily bread of those who practice daytrading, or trading on a daily basis.

Index [Hide]

1 Advantages of scalping in Forex
2 disputes for the use of scalping in Forex
3 Eye to costs
Advantages of scalping in Forex
Among the advantages of scalping there is the possibility to exploit the moments of greater volatility of financial products, including currencies. These moments of frenzy are not casual, but often respond to events, such as a statement by a member of the ECB (e.g. the President, currently Mario Draghi), or the IMF (International Monetary Fund), the Fed (Federal Reserve) and More. Considering the EUR/USD cross for example, events involving mainly USA and Europe should be taken into account in the GBP/USD ratio instead of Britain and so on. The advantage is to be able to act before planned events, from the possible outcomes. Moreover, factor not of little importance, the possibility of closing a position shortly after time is a weapon in addition against possible movements in opposite directions to our prediction in order to protect our capital.

Controversy over the use of scalping in Forex
As you can understand, the use of scalping in Forex is regulated in such a way as to not allow exaggeration in speculations. Speculation itself is a completely legal and normal practice if made within the limits of the regulations. The buy low resell high is part of that myriad of fundamental blocks of which capitalism is composed and especially the neo-capitalism. In addition, if a broker allows you to do certain operations, the final liability is the same broker. With regard to this topic, or the internal rules of brokers, the so-called terms of service, we will dedicate a separate article. For now, it is enough to know that the trading software of the most important brokers are made in such a way that until you can click, the operation will be able to say feasible.

Eye on costs
Although scalping might be interesting and convenient, keep in mind that for every operation you do (every position you open), the broker will deduct a small amount, the only cost you will face for transactions. We remind you that the broker does not earn if you win or lose, but simply applies a small cost to the opening of a position. So in order to be profitable a scalping operation, it must see a profit margin that considers the costs of the operation, and not just the simple rise. The upside, that is, must also cover the cost of the operation. For this reason, the most volatile products are recommended (e.g. raw materials or currencies in times of greater frenzy).

Go to next lesson-economic indicators

Forex trading Orders

In past lessons we have highlighted two different types of Forex orders that allow us to profit and manage the risk through automatic stops, called stop-limit and stop loss. However, although these are the most used orders in Forex and not only, they are not the only existing orders. In fact, in the world of Forex you may someday find platforms (already existing or that will be born) that allow you to make other kinds of order that we will see in this article. These are part of a series of orders that have seen the possibility of application in the first trading platforms on the online Forex of the late ‘ 90, when in Italy still had to explode totally the phenomenon of the Internet. They were international platforms with bases in other countries, which as before often happened were moving much faster than us as a novelty on the net. So we come to list the different types of Forex orders with their most professional nomenclature:

1 order to the market or unconditional (MKT)
2 Conditional order
3 order limit or limit order (LMT)
4 order Stop or Stop order (STP)
5 Order stop limits or stop limit order (SLO)
6 Trailing Stop (TS)
7 Stop All
order to the market or unconditional (MKT)
With the term “market order”, “unconditional order”, “Order at best”, in English “market order” or “at the Market” (MKT) means a basic type of command with which it is confirmed to accept unconditionally to enter into a position or to exit it. In practice, it is the “buy”, “sell”, “long”, “short” type marking. It is a point where you “sign” and from which you can not go back. When you decide, that is when you issue an order to the market you do it at the market price of that precise moment, or the market price “current”. Once the order has been made, it is necessary to wait a few moments to verify that there are conditions to accept it.

Conditional order
Conditional orders are set by traders and are forwarded to the market automatically when a certain condition occurs. As long as this condition does not occur, the order remains inactive on the financial intermediary’s server. The server, beware, as these orders are made electronically, for example through online trading platforms. Examples of conditional orders are Stop loss, that is, the order that closes a position once a certain level of loss is reached, or Take Profit, an order that closes a position once it reaches a certain level of profit.

Limit order o limit order (LMT)
This is a very interesting order with which you ask to buy or sell only from the moment a condition occurs. So unlike the stop, with a Limit Order you open a position, you don’t close it. There is the possibility to set both Limit order and Stop order, in order to set on the server the conditions with which you want to enter and the conditions to which you want to go out.

Stop Order (STP)
The stop order are orders with which you want to enter the market to reach a price quotation, or exit. The most popular example of stop order to quit is the stop Loss. The STP order becomes MKT when the price of the stock reaches the level we set as “alert” or “alert”.

Stop or stop limit order limits (SLO)
These orders, although they may appear more complicated, are nothing but a mix of STP and LMT. In fact, to issue this order you need to fill out two modules, the stop and the limit.

For example, if we want to open a Buy on EUR/USD at 1.1010 with limit to 1.1250: it means that we want to go long if the price going up will arrive to 1.1010 but we want to pay maximum 1.1050. However, if the title climbs very quickly above quota 1.1050 and does not return in the vicinity of this quota, the order will not be executed completely. It could take a little elasticity.

Trailing Stop (TS)
It’s an order that you hear about often. It is a dynamic and decidedly technological order that allows you to follow a position as the price change of the stock. Trailing means “Follow the tracks” And if for example you open a position with a certain stop loss, while the direction of the title shows favorable, the trailing stop or “stop operating” will increase the level of alert following the direction Positive of the prediction. In this way, the trader will benefit from an optimized profit.

Stop All
“Stop All” means the closure of a position, a total closure of the position. Once this is done, the trader can make a definitive balance of the