There are different types of trading orders that you can use to execute all kinds of trades allowing you to easily enter and exit the financial markets at prices and quantities according to your own vantage points.
Once you know how to set-up and submit your trading orders, you can even turn your computer into your own “personal trading assistant.” Your trades will automatically be executed once the price is “hit” according to the price entered in your trading orders. This will allow you to be free from your computer during market trading hours where your trading system is essentially now operating on autopilot.
(To learn how to do this click on How to Trade on Autopilot).
With today’s professional online brokers it’s easy to prepare your trading orders at any time (day or night) right on your computer screen and immediately submit them to your online broker just waiting to be executed.
Operating Your Own “Trading Command Center”
With the ability to conveniently place your trading orders at any time, you can strategically deploy your trades as if you had your own “trading command center” right from the comforts of your home or even if you are traveling the world!
Trading orders can consist of:
- Basic Orders
- Advanced Orders
- Time Based Orders
Depending on the type of trading orders that you will be using, they will operate and function differently.
Basic Orders:
- Market Orders – buy or sell immediately at best possible current market prices (subject to slippage)
- Limit Orders – set your own price to buy or sell (buy at best possible price on or below the limit order or sell at best possible price on or above the limit order)
- Stop Loss Orders – set your own price to sell your “long” position if it falls to a certain price below from where you bought it at (sell at best possible price on or below the price set in the stop loss order)
- Buy Stop Orders – set your own price to buy above the current trading price (buy at best possible price on or above the buy stop order – subject to GAP risk)
- Sell (“Short”) Stop Orders – set your own price to sell (“short”) below the current trading price (sell “short” at best possible price on or below the sell stop order – subject to GAP risk)
- Buy Stop-Limit Orders – if a stock reaches a certain price above the current trading price the “stop” and the “limit” features of this order will set the acceptable buying price range (the “limit” part of this order also protects against upside GAP risk)
- Sell (“Short”) Stop-Limit Orders – if a stock reaches a certain price below the current trading price the “stop” and the “limit” features of this order will set the acceptable selling “shorting” price range (the “limit” part of this order also protects against downside GAP risk)
- Market on Close Orders – buy or sell at the market price on the close
Advanced Orders:
- One-Triggers-Other – if order A is executed then order B will automatically be placed
- One-Cancels-Other – if order A or B is executed than the other (unexecuted) order will automatically be cancelled
- Contingent – upon a contingent event happening on order B, order A will then be placed
- Trailing Stop – automatically trails behind the price of the stock either by a certain fixed amount or certain percentage (serves as stop loss protection and to lock in profits)
Time Based Orders:
- Day Orders – in effect until the end of the trading day
- Good-til-Cancel (GTC) Orders – in effect until you cancel them or as cancelled by your broker after they have remained in effect for sometime such as 60 days
How To Use Stock Trading Orders To Your Advantage
Example: If you think that a stock may explode to the upside once it has hit a certain higher price, you can place a buy stop-limit order to automatically be triggered to buy at that “takeoff” point.
Example: If you want to slowly build positions by scaling into them with respect to quantity and price, you can do so by strategically placing multiple trading orders.
Example: If a stock has been trading in a sideways price consolidation range after a recent run-up and you would like to trade it but are unsure about which way the stock may breakout from its consolidation range – you could place an advanced trading order (one-cancels-other) to either buy the stock or “short” the stock once the stock departs in either direction from its consolidation range.
Example: Just like any major department store that offers a 10% to 15% discount on its finest merchandise, you can also set your trade order to achieve the same discount effect on your favorite stock.
Last Thoughts On The Different Types Of Trading Orders
By becoming a smart technician in knowing how to prepare different types of trading orders, you will greatly add convenience and sophistication to your trading system.
This will allow you to trade the financial markets at your own discretion and to be in control where you can set your own prices and quantities according to your own vantage points.
After submitting your trading orders, it doesn’t matter if you remain in front of your computer or are away from it – since now your computer will be automatically trading for you according to your trading orders. This will be like having your own “personal trading assistant.”
