Forex trading can be fun and lucrative, but if not done properly, it can also take more time than you have to manage it. In order to have your Forex trades managed the way you want them to be, you can set up Forex orders. These orders will request that your broker buy, sell or close out your position at specific times, deemed by you.

The three most common types of Forex orders are limit orders, market orders and stoploss orders.

A limit order is an order you place to buy or sell at a certain price. For example, let's say you buy Pounds Sterling and sell US dollars thusly by issuing the following market order: GBP/USD = 1.9710/1.9715. You can then set up a limit order to sell Pounds Sterling when the Forex quote has increased by 50 pips, such as with the following: GBP/USD = 1.9760/1.9765. If you wish, you can also utilize a time frame for your limit order. For example, you can request to close the trade at the end of the trading day, whether or not the price has gone up by 50 pips. An alternative to this is that you can request that the trade would continue until the price has either increased by 50 pips or you cancel the trade altogether.

A market order happens when you sell or buy currencies at the current market price. This is what usually happens when you open an order.

The stoploss order is an order whereby you order your trade closed if the market should move against you. For example, if you buy Pounds Sterling when the quote is: GBP/USD = 1.9710/1.9715, you could order a stoploss to close the trade if the quote goes below GBP/USD = 1.9690/1.9695. This would mean that you would only lose 20 pips plus the bid/ask spread.

Other types of orders include:

Good till Canceled, or GTC: This keeps your trade open until you order the trade closed, by issuing a market order.

Good for Day, or GFD: This order closes your position at the end of the trading day, which is 5 p.m. Eastern standard time.

Order Cancels Other: This type of order is a mixture of two stoploss or limit orders. As an example, you could set up an OCO to sell your holding of Pounds Sterling when your Forex quote is at GBP/USD = 1.9760/1.9765, or you could close your position if your Forex quote goes below GBP/USD = 1.9690/1.9695.

Usually, GCC and GFD orders are used in conjunction with limit orders.

If you are new at Forex trading, it's perhaps best to start with the first three order types mentioned. In other words, stoploss, markets and limit orders are the basics you should start with. It's most important that you familiarize yourself with a stoploss order before you start trading in earnest. Most Forex trading sites will let you familiarize yourself with their procedures by doing mock trades until you are completely familiar with them. This is imperative that you do this and familiarize yourself with a stoploss order in particular before you begin to trade with real money. Otherwise, if the trade moves against you, you could lose all the money within your account.

In the vast majority of circumstances, a reputable broker will not let you keep trading if your account drops below zero. Even so, this may not protect you in volatile markets where currency values can change very quickly. Therefore, there's a slight chance that you could lose more than just your equity in your account. However, this is only likely if you trade with margins that are less than 1% or if you have too much leverage, which means that you don't have adequate unused margin in your account.