It is very important for Forex traders to know their trading tools well. Various FX brokers offers an array of tools that are used for trading the Forex markets.
Practically, traders often use one or more than one trading system/software to trade Forex online. These software are often come in a package when you open an account with Forex brokers.
In brief, this is how this software works: The Forex trading software is connected to the broker’s system via Internet, currency prices are updated live, and you make your call on trade via the software.
Such trading software often requires minimum computer powers thus it can be run on most home computers nowadays as long as it is connected to the Internet.
In normal case, automated trade order functions are embedded in Forex trading software. For Forex trading, stop loss order and limit order are the two most used function.
Limit orders:
As a trader, you can place these orders when you wish to buy/sell the currency at a better price compare to current market. Limit orders are often used to take win automatically when the price reaches certain level. For example, current EUR/USD is at 1.2693 and your predetermined limit order is to sell all at 1.2700. The order will auto-execute whenever the price reach 1.2700.
It is important to learn that limit orders can be only placed at least the minimum distance from the current market price. Also, such order can be cancelled or modified anytime by you as long as the limit order price tag is set further than the minimum distance allowed.
Stop orders:
Stop orders, or sometimes known as stop loss orders, are automated orders used to restrict and limit the losses of an open position. It can also be used to lock on a profit in your trade when the market is going in your favored direction.
Stop orders work similarly to limit sell orders, it predetermine what is the lowest price to sell in certain deals. For example, EUR/USD 1.2693 with stop order at 1.2685, the system will sell your portion of USD if the price touches the 1.2685 level. The price 1.2685 is guaranteed on such case, meaning even if the market sink too fast and it falls below 1.2685, you still can sell your money in the price that you set earlier.
Recommended Forex trading software
DashBoard FX is one of the best trading software you can have online. It provides real-time FX currency signals, trade alerts, as well as a well-designed FX trading software (DashBoard FX).
Learn more about Forex tools here at: www.fxuniversal.com.
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