Common Types Of Order

There is a great range of orders that traders can give to precisely control the execution of their order. Not all brokers will accept the same range of order types, but I list below the most common types of orders that most brokers should accept.

Market Order

An order to buy or sell at the current market price.

Limit Order

An order to buy or sell at a specified price or better.

Stop-Loss Order

An order to close a position if the market price hits a certain level. Note however, that this type of order means that after the stop price is hit the order becomes a market order and you may suffer slippage.

Limit Entry Order

An order to buy below the market or sell above the market at a specified price. You use this type of entry order if you feel that the currency pair will reverse direction from that price.

Stop-Entry Order

An order to buy above the market or sell below the market at a specified price. You use this type of entry order if you feel that the currency pair will continue in the same direction. Just like with a stop order, you may suffer slippage when using this type of order.

Stop-Limit Order

An order to buy above the market or sell below the market at a specified price only. When your price is hit your order becomes a limit order which prevents slippage. However, there is a chance that in a fast-moving market your order won’t be filled at all.

One Triggers Other(OTO)/ Parent and Contingent

A set of orders whereby when the parent order is filled, the contingent order is placed. This is commonly used to make sure a stop and/or limit order is placed as soon as an entry order is filled.

One Cancels Other (OCO)

A set of orders whereby when one order is filled, the other order is cancelled. This is commonly used to set both a profit-taking limit order and a stop-loss order as soon as an entry order is filled.

Types of Technical Indicators

Extracted from:

http://EzineArticles.com/?expert=Ryan_Lee and

http://EzineArticles.com/?expert=Hideyoshi_Taro

Types of Technical Indicators

The basic one, called a moving average, involves a simple formula that analyzes the average price of a security or commodity over a period of time, and when isolating time periods, it is much easier to spot different trends. Other types of indicators belong to four major groups, as follows:

• Momentum indicators - Stochastic oscillator, Commodity channel index, RSI, Chande momentum oscillator (CMO) and more.
• Volatility indicators - Bollinger bands, projection oscillator, average true range, Trading bands (envelope) and more.
• Trend indicators - MACD, parabolic SAR, linear regression, Forecast oscillator and more.
• Volume related indicators - Ease of movement, OBV, Demand index, Chaikin money flow and more.

In technical analysis, trading indicators can be categorized into three main categories as follows:

1. Leading indicators
This type of indicators tend to give traders buy or sell signals before market makes its turn. The leading indicators predict a top or a bottom of a market but they do not predict specific price levels or duration of a move. Although there are so many leading indicators in theory, it is hardly to find ones that truly lead the markets. The Leading indicators are considered to be the most useful for the beginning traders since they allow ample time for traders to prepare their trades. One thing to remember when applying leading indicators in trading is they are just telling that a move is going to happen but it has not begun yet. While it seems like leading indicators offer traders the best of all worlds, there are drawbacks when using such indicators.
One major problem occurs because it may point traders to enter a trade too early. Exposure to price fluctuations that occur before the beginning of the indicated up or down trend may cause traders to bail out early. When traders are limiting risk in a particular trade but have bought early according to a leading indicator, they may be stopped out and lose all potential for profit.

2. Time current indicators
This type of indicators tend to turn higher or lower at about the same time that a market does. They can be very helpful in long-term trading, and are considered such indicators practically as useful as leading indicators.
Though, the time current indicator does not expose to pre-move price fluctuations as much as the leading indicator does. However, traders have to make their decisions about buying and selling quickly with indicators, as the price should be making its move at the same time they are taking a position.

3. Lagging indicators
This type of indicators are those that lag behind market movements. The market moves,and the lagging indicator moves after it. These indicators are also referred to as trend-following indicators because they just follow trends and do not attempt to predict them. Using lagging indicators to make decisions about buying and selling gives traders disadvantage since this will results in buying and selling after the tops and bottoms of market trends. The goal in using a lagging indicator is that traders will be able to profitably grab a significant portion of a trend before the indicator changes direction again.

The Three M's of Successful Trading

Extracted from the book: Come Into My Trading Room, Alexander Elder


To succeed in trading, you need several innate traits without which you shouldn't even start. They include discipline, risk tolerance, and facility with numbers. In additional, successful trading requires 3M's - Mind, Method and Money. 

- Mind means developing psychological rules that will keep you calm amidst the noise of the markets. 
- Method is a system of analyzing prices and developing a decision-making tree. 
- Money refers to money money management, which means risking only a small part if your trading capital on any trade.

Trading is a journey if self-discovery. If you enjoy learning, if you are not scared of risk, if the rewards appeal to you, if you are prepared to put in the work, you have a great project ahead of you. You will work hard and enjoy the discoveries you'll make along the way.


The first Steps
Trading lures us with its promise of freedom. If you know how to trade, you can live and work anywhere in the world, be independent from the routine, and not answer to anybody. Trading attracts people of above-average intelligence who enjoy games and aren't afraid of risks. Before you rush into this exciting venture, keep in mind that in addition to your enthusiasm you will need to bring a sober understanding of the realities of trading.


- Trading will stress your feelings. To survive and succeed, you will need to develop a sound trading psychology.


- Trading will challenge your mind. To gain an edge in the markets, you will need to master good analytic methods.

- Trading will demand good mathematical skills. A math illiterate who can't manage risk is guaranteed to bust out.


Trading psychology, technical analysis, money management - if you learn all three, you can make it in trading. The market are set to separate the maximum number of people from their money. Stealing is not permitted but markets are heavily slanted in favor of insiders and against outsiders. Markets keep changing, and flexibility is the name of the game. Market operate in an atmosphere of uncertainty. There is no certainty, only odds. Here you have two goals - to make money and to learn. Win or lose, you have to gain knowledge from a trade in order to be a better trader tomorrow. Scan your fundamental information, read technical signals, implement your rules of money management and risk control. Now you are ready to pull the trigger. Go!

Good traders keep good records. They keep them not just for their accountants but as tools of learning and discipline. If you do not have good records, how can you measure your performance, rate your progress, and learn from your mistakes? Those who do not learn from the past are doomed to repeat it.

Trading Formula

Extracted from the book: How to Trade in Stocks, Jesse Livermore

Market  Timing - When to enter and when to exit a market trade - "when to hold 'em when to fold 'em".

Money Management - Don't lose money - don't lose your stake, your line. A speculator without cash us like a store owner with no inventory. Cash is a speculator's inventory, his lifeline, his best friend - without it you're out of business. Don't lose your line.

Emotional Control - Before you can successfully play the market you must have a clear concise strategy and stick to it. Every speculator must design an intelligent battle plan, customized to suit their emotional makeup, before speculating in the stock market. The biggest thing a speculator has to control is his emotions. Remember, the stock is not driven by reason, logic or pure economics. It is driven by human nature which never changes. How can it change, it's our nature.

7 Habits Of A Highly Successful Trader (6 of 7)

6) View Trading as a Score in Points and Not In Money:

Really what I am saying is "follow your time tested rules which you have complete belief in and forget about everything else" 

How can you do that when it's money we are trading with? Use some imagination. Pretend it's not money but simply a game your playing and your account represents points scored. Stop counting dollars every time the market moves and start concentrating on following your rules flawlessly. When you can operate on this level not only do your profits soar over the long run but it takes away all the stress of trading. 

Think about it. No more are you watching the quotes intra-day thinking "wow! I have just made enough to buy a new car," or "uhhh.. I've just lost my holiday money" This kind of trading is emotionally draining. No-one can succeed like this. This was me in my early days.I would be so down when I checked my quotes during the day only to find I had lost $500. And the next day when I found I was up by $500 I was the life and sole of the party. Even if I could have made a success by trading this way I wouldn't have enjoyed it and I would have given up.

Nowadays with my low risk/ high reward trading system I check the charts at the end of day in 5 minutes and that's it. I simply ask my-self: " Should I buy, sell or hold according to my rules?" I give my-self ten seconds to answer and do what has to be done. I am not a trader any more but a rule follower. That's how I feel. ( why do you think I have so much time to write?) 

Reading Market Wizards I and II it was a prominent feature I noticed with all top traders. They never saw the markets as a cash box but simply as a way of operating a business. the name of the business was to follow their rules and score the points. It's not possible to become a top trader if you view every tick in the market as money lost and gained. 

If making and losing money leads to emotional distress and joy and emotions are one of the most potent destroyers of successful trading then common sense dictates that in order to be a Highly Successful Trader you must eliminate all emotion from trading. How is this done? Easy, follow the rules. How do you follow your rules? Make it THE most important element in your trading. Forget about the money that will take care of it-self it's all about those rules and how well you can follow them. 

If you ever just read one book on the stock market then please let it be: " How I Made $2 million" by Nicolas Darvas 

I love this book so much because when you have read it as many times as I have (50+) you begin to realize how well this guy turned his trading around from an emotional losing trader into a robotice, disciplined, money, generating, machine. What made his success possible? Apart from the usual accepting complete responsibility, developing a system that fitted him, planning his trades and lots of initial groundwork. The real reason he made so much money was because he never counted the money in the general sense. He had a set of rules and when it flashed a buy he placed on a percentage of his capital. It made no difference whether it was $5,000 or $500,000, it was all the same to him. He stopped counting money and flawlessly followed his rules. 

If I could just describe a section that had profound effect on my trading. In one trade Darvas bought $350,000 of a share at $53 1/2. The share then climbed to over $100 and his broker telegrammed him with the message: "profits now $250,000" Darvas now realized that whilst he had been so busy concentrating on folowing his rules he has forgotten all about the paper profits building up. When he received the telegramme he now knew if he sold out he would be rich for life ( this was the 1950's) Every fiber in his body was saying "sell. abandon your rules and take the profit." 

So he walked around Paris trying to work out what to do. Questions and thoughts such as will the share fall back? Should I sell and take the sure profit? Shall I just break my rules this one time? Kept repeating them-selves time and time again. 

Finally he decided not to sell and to stick with his rules. It was anything but easy to do. But he was proved right. In the weeks ahead the share continued to rise and making that decision to stick to his rules he was able to hold on and make much more profit. 

Had he have constantly been calculating his trades on a day to day basis in money terms I doubt he would have had the nerve to stay in so long. Amazing story and one definitely worth reading. 

You see how theory is all very well. Every trader worth his salt knows the Wall Street sayings : 

"cut your losses" 

"let your profits run" 

"trade with the trend" blah,blah,blah 

But it is another ball game to do this in the heat of battle. 

Time and time again when I enter a trade I want to bend the rules, "just this one time." But I have gathered enough experience to realize I can NEVER break my rules. Not one trade can be the exception. I have learned to do this by counting in terms of points scored and not money.

What separates the winners from the losers? It's certainly not knowledge? I believe what really separates winners from losers is the ability to follow your rules without exception, regardless of the circumstances. Very few traders have the discipline to do this.