Trading with real money should be viewed as a serious business. As such, you should take the time to ensure that you thoroughly understand the most basic tools of the business. Many CFD traders have missed opportunities or closed out of trades at the wrong time simply by placing the wrong type of order. At the very least, you should understand the following order types.
Market order
Used to execute a trade at the current price.
Stop order
To exit a trade, place a stop order at a level that is worse than prices currently available. On a long position, the stop-loss order to sell would be placed below current prices. Conversely, on a short position, the stop-loss order to buy would be placed at a level above current prices.
Limit order
To exit a trade, limit orders are placed at a level that is better than the current price. When seeking to lock-in profits on an open long position, a limit order to sell would be placed at a level above current prices. If seeking to lock-in profits on a short position, a limit order to buy would be placed at a level below current prices.
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