Stop If Bid and Stop If Offer Orders
Both stop-if-bid and stop-if-offer are stop orders used to limit trading losses resulting from market uncertainty. Stop orders are excellent tools against high price volatility and low market liquidity. Both stop-if-bid and sop-if-offer orders are common in forex market, but remember not all forex brokers allow these orders.
Stop if bid orders are practiced in rising markets. These are orders to close a trade when the bid price touches or breaches a specified level. Stop if bid orders are usually employed to buy a forex position once a certain level is broken. For example if you sell GBP/USD for 1.9815 with a stop-if-bid at 1.9820, the position will be closed when the bid price touch/breach 1.9820.
Stop if offer orders are practiced in falling markets. These are orders to close a trade when the offer price touches or breaches a specified level. Stop if offer orders are used to sell a forex position once a certain price level is broken. For example if you buy GBP/USD for 1.9815 with a stop-if-offer at 1.9805, the position will be closed when the offer price touch 1.9805.
Using stop-if-bid orders to sell forex positions and stop-if-offer orders to buy forex positions can cause problems like closing of positions in low liquidity causing temporary spread widening.
Stop if bid orders are practiced in rising markets. These are orders to close a trade when the bid price touches or breaches a specified level. Stop if bid orders are usually employed to buy a forex position once a certain level is broken. For example if you sell GBP/USD for 1.9815 with a stop-if-bid at 1.9820, the position will be closed when the bid price touch/breach 1.9820.
Stop if offer orders are practiced in falling markets. These are orders to close a trade when the offer price touches or breaches a specified level. Stop if offer orders are used to sell a forex position once a certain price level is broken. For example if you buy GBP/USD for 1.9815 with a stop-if-offer at 1.9805, the position will be closed when the offer price touch 1.9805.
Using stop-if-bid orders to sell forex positions and stop-if-offer orders to buy forex positions can cause problems like closing of positions in low liquidity causing temporary spread widening.
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posted by Daniel Pipitone at
4:23 AM
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