Trade Gold Trading

XAU USD Orders

There are different types of Gold orders which a gold trader can use to trade XAUUSD.

To trade gold well, a gold trader must know the order types for XAUUSD. Learn each order's role so you use it right. The key is to grasp every order you place in XAUUSD trades. Avoid opening any order you do not know.

Below is a listing of basic definitions of the orders which are commonly placed in the market when trading Gold metal online.

Market Order

Market order is the most basic order that is used to trade gold. This order is used to buy or sell at the current bid or ask quote. This is the price that is presently appearing on your trading software.

This type of order allows you to buy or sell at the current quoted market price with immediate execution. As soon as you decide to enter a trade, you can place this order and initiate buying or selling at the press of a button.

Entry Orders

These orders start a new trade after the price reaches a level the trader sets. People use these orders to buy or sell Gold when its price hits a certain target. When the price reaches this target, the order is carried out.

These specific orders are employed to initiate a trade once a predetermined price point is reached. Since a trader might not always have the capacity to constantly monitor market activity, a gold trader will establish and place these entry orders so that when the specified price level is attained, the pending entry order is automatically triggered, resulting in the mechanical opening of a buy or sell position.

If a trader anticipates a specific market direction, such as the continuation of an existing trend, or believes that a certain support or resistance level for XAUUSD will hold, they can utilize entry orders to specify the trade to be opened and the price at which it should be initiated.

These orders are also known as pending orders because they aren't carried out right away: instead, they're held until the price of Gold hits a certain level.

There are 2 categories of entry orders, these are:

  • Entry Limit
  • Entry Stop

Entry Limit

An order to buy/sell Gold at a particular limit.The limit can either be below or above the ruling price.

  • A limit that is below the current price is used for buying
  • A limit that is above the current price is used for selling

These orders are set by traders when they expect the market to bounce back after reaching the level at which the entry limit was placed.

A Buy Limit Order specifies the intention to purchase at a price point situated beneath the present market value.

Say you want to buy XAUUSD but only if it drops to a support level. Instead of jumping in at the current price, set a Buy Limit order at that support area below the market price. Once XAUUSD hits your target, the order kicks in and you're in the trade.

This order will be executed once price falls to buy entry limit level.

A sell limit order allows you to open a sell position at a price higher than the current market value.

This order is set by a trader who wants to sell XAUUSD, but does not want to sell at the current price but wants to wait until XAUUSD touches a resistance area - & sell the Gold once price hits this resistance level. To do this a gold trader will set the Sell Limit at this Resistance Level that is above the current market price.

This order will be executed once price rises to the sell entry limit level.

Entry Stop

This is an order to start buying above the current price, which keeps going up, or to sell below the current price, which keeps going down. These orders are set when a xauusd trader thinks the current market trend will continue, but the online traders want to buy at a higher price, perhaps after a price breakout, or sell at a lower price after a price breakout.

A Buy Stop order dictates the purchase of Gold at a price point situated above the current going market rate.

When buying this order is opened/executed as the market heads upward and touches the buy stop entry level.

Sell Stop Sets XAUUSD Sale Below the Current Price Level.

When selling, this order is initiated/activated as the market declines and reaches the specified sell stop entry level.

Such orders are also useful in trading consolidation patterns. A trader might place a buy order above the consolidation zone and a sell order below, leveraging potential price movement in either direction.

In later lessons, we will learn to place Entry Limit and Entry Stop Orders when trading XAUUSD online.

Learn More Guides & Lessons:

Gold Broker