Execution of orders: Instant and Market Execution

  • Jul 02 2021
  • by
  • Analyst AZA
Execution of orders: Instant and Market Execution

Execution of orders: Instant and Market Execution

 Among the trading conditions that brokers of the foreign exchange market offer, it is worth highlighting some indicators - in particular, the type of order and the speed of execution of the order.

Thus, clients are offered two types of implementation: Market Execution and Instant Execution In Forex, the execution of an order is a method of execution through which the trader's order is transferred to the currency exchange. The very speed of transferring the application directly depends on the broker chosen by the player.

Unambiguously, when choosing an intermediary, you should pay attention to the implementation of the execution of orders: for effective work, you need to know what is the difference between the two execution options.

Let's take a closer look at the method:

1. Instant order execution  «Instant Execution» - translated from English means instant order execution. Some brokers use this definition on purpose, assuring users that they are in reality providing an instant implementation. But is it so? If we talk about the issue in-depth, then for a trader, first of all, the actual principle of implementation is relevant, and not the speed with which orders are executed. The principle (method) of execution is a kind of rule-based on which the client-trader is given access to the market. This principle has nothing to do with market size such as speed. The speed, in turn, is set by the dealing center - a brokerage company and is largely determined by the specific policy and conditions that it offers to its clients. Going deeper, we can say that «Instant Execution» is the exact execution of orders. Let's consider the exact implementation option in more detail The main point of this option is as follows: the forex broker assumes responsibility to implement the client's order (a BUY or SELL trade order) at the exact cost that was at the time of the request (and at the same value as indicated on the chart) or not at all. But at one point or another - when a specific forex broker begins to process orders and user requirements, and then begins to display transactions on the interbank currency exchange market (forex market).

Of course, such actions take no more than 10 seconds, but the exchange cannot stand still, because the market situation changes almost every second. And the following price behavior is possible: it will either remain at the same level, or it will rush up or down. But as mentioned above, the rules of «exact implementation» establish the obligation of a foreign exchange dealer to enter the user into the exchange at a fixed-established value. Or do not display it at all. If there have been no price changes, then the implementation of this order will be carried out at the cost - the price that was set following the request.

Everything is very clear here and there is nothing complicated. In a situation when the price has gone down, the broker can take steps to sell at a set price, and make a profit, both from the spread and from the price difference: he will have the opportunity to purchase an asset at a lower price than the trader is asking for.

2. Positive aspects of «Instant Execution» If the tactics by which the player trades assume an exact entry - only at the requested cost, and does not imply entry under any other circumstances, then the principle of instant execution will be the only correct option for the player. The described method allows setting pending orders - take profit and stop loss, without delaying orders for sending. The instant implementation system is well suited for scalpers who are free to navigate market movements. The main drawback of Instant Execution is requoted: excessively active market volatility can provoke a threat not to enter the exchange by the generated signal.

3. Market execution of orders «Market Execution» - literally from English means execution on the market, and its meaning is to provide information about the rules for the user to enter the market. Market execution of orders implies the obligatory execution of an order for the conclusion of a trade operation. Along with such regulations, the order will be executed at the price that is valid at the time the order is executed, and not during the period when it was placed and submitted. Brokers who work according to the market execution system guarantee their users almost 100% of the order execution, but at the same time, they do not exclude the possibility of its implementation at the same price that was present on the chart when the BUY / SELL button was clicked, and at the price that was valid on forex at the moment of order execution. But one way or another, there is always a possibility that the value at which the order will be executed will be either better or worse than the quote that the player observes when submitting the order. If we talk about positive and negative aspects, then they are as follows: - if the player is interested in the implementation of the order in a fixed order, without reference to the price, then the trader should opt for the market execution of orders. Despite any price behavior, the order will be 100% executed.

At the same time, requotes are excluded. But at the same time, sharp market jumps can provoke execution at a price that is not the best for the player.

Unambiguously, when choosing an intermediary, you should pay attention to the implementation of the execution of orders


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