“Where instant can often mean delayed and sometimes disappointment”

Moving away from Broker Models for a breath, we want to take traders through “Instant Execution” and how their Instant orders are really handled by their Broker.

As the most common form of execution for Mt4 Brokers “Instant Execution” is a very misleading name which many traders take to mean “Immediate, No Delay Execution”, however like many things in life, it does not really work this way when put into practice.

When trading with a reputable Broker the work flow for an Instant Order should be as follows, every time a trader clicks Buy/Sell on Mt4 it will send a request to a Brokers Mt4 servers which will then be subject to a check from the Brokers systems in order to determine whether or not the price is still valid or if the market has moved away from the traders requested trade price. Trades which are within an acceptable range for the Broker will be accepted, at this point a confirmation is sent back to the trader and their position will be opened. However, for trades which fall outside of this acceptable range, these will most likely receive a re-quote from the Broker, whereby a new price is returned to the trader who has the option to either accept or reject the new price at which they can open their trade. Upon accepting the price the whole process begins again, this can result in the client’s trade being accepted by the Broker or their receiving a second re-quote. All of this should occur with little or no manual intervention from the Broker.

If as a trader you witness that you are receiving a very high number of re-quotes or you are experiencing significant delays on the execution of your orders, then it may be high time to look for a new broker. More experienced and larger Brokers will run at very high levels of automation, meaning that your orders are most likely being handled by a software that should treat them fairly and accept trades within an acceptable range/time-frame. However smaller Brokers will often run at lower levels of automation, where they manually accept/re-quote trades of all trade sizes, this behavior is open to error and manipulation on behalf of the Broker, once manual intervention is involved it tends to result in a worse outcome for traders.

Looking at the explanation above, it should be very clear that Instant Execution is not in fact “Instant” and it is often the case that Instant Execution is slower than other execution types available to traders. So if it is slower why choose to trade this way, the answer is rather simple, when trading through Instant Execution, the trader will always open orders at their requested price or a re-quoted price they have accepted. This means that for Instant Execution a trader cannot be filled at a worse price, something which many traders believe to be a key benefit when trading.

Despite offering some benefits Instant Execution is not without its drawbacks, the delays and re-quotes which we have mentioned above do occur to traders of all sizes and even the good guy Brokers will re-quote clients from time to time, especially during volatile periods.

So it really comes down to your own trading preferences, if you prefer to know your entry price at all costs and you are willing to accept the possibility of missing your trade entry due to a re-quote then it’s Instant Execution all the way, but if you prefer guaranteed entry with quick speeds then Instant Execution may not be your weapon of choice.

#tradesafely #insideman




Instant Execution vs Market Execution

The alternative type of execution available for traders,

“Market Execution”