Forex Trading Forex Trading Orders and Execution 2

Question 1

What is a 'buy stop' order used for in Forex?

Accepted Answer

To buy a currency pair above the current market price once a level is broken

Answer

A buy stop order is placed above the current market price and triggers a buy when the price rises to that level, often used to enter breakout trades.

Question 2

What is a 'sell limit' order in Forex?

Accepted Answer

An order to sell at or above the current market price at a specified level

Answer

A sell limit order is placed above the current market price and executes when the price rises to the set level, allowing traders to sell at a better price.

Question 3

What causes 'requotes' in Forex order execution?

Accepted Answer

Market price moving away from the requested price before the order is filled

Answer

Requotes happen when the market price changes between order submission and execution, and the broker offers a new (different) price instead of filling the original order.

Question 4

What is 'order execution speed' important for in Forex trading?

Accepted Answer

Faster execution reduces slippage and ensures trades fill near the desired price

Answer

Fast order execution is critical in Forex because prices change rapidly, and delays can result in slippage — getting filled at a worse price than expected.

Question 5

What is a 'pending order' in Forex?

Accepted Answer

An order set to trigger automatically when the market reaches a specific price

Answer

A pending order is pre-set to execute automatically when the market price reaches a specified level, without requiring the trader to be actively watching.

Forex Trading Practice Test

Forex Trading Practice Test

Forex Trading Forex Trading Orders and Execution 2