Entry Orders: Top 5 Benefits of Using Them in Forex

Entry Orders Command is a very useful order in Forex trading. Traders can strategize to create an excellent Forex trading plan. However, if they cannot execute the plan effectively, all efforts will be in vain. The Forex market operates 24 hours a day, which means no trader can monitor the market at all times. Therefore, they need a tool that allows them to execute their trading plan in alignment with their daily schedule.

So, what is an Entry Order, and how does it work? An Entry Order in Forex allows traders to set a predefined price at which they want to buy or sell a currency. This action is only executed when the price reaches a specific level. Below, we outline some of the key benefits of using Entry Orders in Forex trading.

1. TOP 5 BENEFITS OF USING ENTRY ORDERS IN FOREX

Among the different types of orders in Forex trading, an Entry Order is known as an order that sets a specific price for a currency pair. Once the price reaches this level, the order is executed/activated. If the price does not reach the expected level, the order remains inactive. Since there are various types of orders, careful consideration is required before placing an order.

1.1. Price Control

The first advantage of an Entry Order is the ability to control price levels. Traders can set their expected price, and once the market reaches that level, the order is executed. This type of order also helps traders define specific price points for trading without needing to constantly monitor the market.

Below is an example of an order ticket screen, where traders can set the execution price. The execution process and interface are generally similar across most trading platforms.

1.2. Time-Saving

Entry Orders in Forex trading are highly beneficial as they help traders save time. By placing an order, traders do not need to stay at their computers when a trendline is reached or when the price breaks its key price channel. They can easily set an Entry Order to enter a trade when the price moves as predicted. The order will remain pending until executed, allowing traders to focus on other tasks.

Stop and Limit Orders

Traders can take it a step further by setting stop and limit orders to manage their trades if the Entry Order is triggered while they are not actively using the platform. This ensures that no uncontrolled trades are executed without accompanying management orders.

To set up this type of order, fill in the “Stop” and “Limit” fields on the order ticket when placing an Entry Order (as shown in the image below).

Stops and limits set in this way will not take effect until the Entry Order is activated and opens a trade in your account. This means traders do not need to worry about stops or limits being triggered before the Entry Order is executed.

1.3. More Effective Money Management

Entry Orders also help traders save money. To understand this better, consider the amount of time a trader spends trading each day. Is it 12 hours? 6 hours? 1 hour? Or just 10 minutes? Most traders likely spend between 10 minutes to 1 hour on average per day. This is because most traders have daily jobs, families, or other responsibilities.

Now, let’s compare that time to the 24-hour availability of the Forex market. If a trader spends 10 minutes a day executing trades, that means they are monitoring only 0.7% of the market each day. If they trade for one hour per day, they observe about 4% of the market. Knowing this, what are the chances that a trader will be watching the market at the perfect moment to execute an optimal trade?

The odds don’t look great. The optimal trading opportunity is more likely to occur within the 96% of the time that traders are not actively monitoring the market. If traders force themselves to trade only during their available time window, they might end up with suboptimal prices. Suboptimal prices mean traders are essentially leaving money on the table.

Traders should aim to secure the best possible price, even if it’s not available while they are sitting at their computers. That’s why Entry Orders provide an excellent opportunity to execute trades at the most optimal price levels.

1.4. Accountability

Entry Orders (with stop and limit orders) also help traders maintain accountability by eliminating emotions that could interfere with reliable and profitable trades. They ensure traders stick to their predefined rules and strategies.

Before entering a trade, every trader should have a strategy with clearly defined rules. This means they know exactly what to do in any given situation before it happens.

However, in the heat of the moment, emotions like greed, fear, and overconfidence can cause traders to deviate from their original plan. This often leads to impulsive trades, where traders enter the market based on hope rather than calculated risk.

Entry Orders eliminate this emotional risk and hold traders accountable to their strategy, ensuring they maintain emotional discipline in Forex trading.

1.5. Supporting Timeframe-Based Trading

Timeframe-based trading allows traders to execute multiple trades effectively. More specifically, it helps traders align their strategies with upcoming market news, political events, or corporate earnings reports, depending on the market they are trading in.

For example, traders can set an expiration time for Entry Orders based on different conditions:

• “Good till canceled (GTC)” – The order remains active until the trader manually cancels it.
• “Good till date (GTD)” – The order remains active until a specific date.