However, in terms of performance and functionality, it is inferior to the new generation of trading platforms - MetaTrader 5. The program interface has not changed much, but the internal content has become better and more functional. If earlier it was possible to trade only on the currency markets, now the MT5 trading platform allows you to trade not only on CFDs, but also on stock exchanges, buying stocks, futures and options. All this can be done from one account, which greatly simplifies trading. In addition, the speed of order execution has increased, new indicators and tools have been added for technical analysis, the number of available timeframes has expanded, and much more. The number of companies that provide their clients with the opportunity to work with this trading platform is growing every day. In this article, we will look at the differences between the MT5 trading platform and its predecessor, the MT4 trading terminal.
Benefits of the MT5 trading platform
MetaTrader 5 has a huge number of advantages over similar trading platforms. Let's consider the most important of them, and also find out what additional functions appeared in the fifth generation of the popular trading terminal:
MetaTrader 5 is a multi-asset trading platform, with the help of which a trader gains access not only to the Forex market, but also to stock exchanges. In addition to currency trading and trading, you can now buy or sell securities(stocks, bonds, futures) on stock exchanges in the USA (NASDAQ, GLOBEX, NYSE), Tokyo (Tokyo Stock Exchange), London (London Stock Exchange), Hong Kong (HKEx) and others trading floors. To do this, it is enough to open an order to sell or buy, and make a deal on your behalf on the exchange;
Free license. You can download MT5 absolutely free of charge on the official website of MetaQuotes and use it in your trading;
Four order execution modes. With the support of a broker, the MT5 trading platform can implement four order execution modes: Instant Execution (immediate), Market Execution (on the market), Request Execution (on request) and Exchange (exchange). For example, you need orders to open immediately, regardless of the current market price. You choose the Market Execution order type, and the broker executes the order at the market price without requotes and delays;
Six types of pending orders. Two more pending orders have been added to those already known from the MT4 trading platform (Buy Stop, Buy Limit, Sell Stop and Sell Limit): Buy Stop Limit and Sell Stop Limit, which makes it possible to create a more flexible trading system. Buy Stop Limit is essentially a stop order for setting a Buy Limit buy limit order. When this type of order is set, the "Price" field specifies the stop level, upon reaching which the price will trigger an order to place a Buy Limit order at the level that was previously specified in the "Stop Limit Price" field. In this case, the stop level must be higher than the current price, and the price of the Stop Limit order must be below the stop level.
Sell Stop Limit is a stop order for placing a Sell Limit sell limit order. When placing this order, in the "Price" field, you must specify a stop level, upon reaching which the order to place a Sell Limit order at the level previously specified in the "Stop Limit Price" field will be triggered. In this case, the stop level must be below the current price, and the price of the Stop Limit order must be above the stop level;
One Click Trading function. Thanks to the "One Click Trading" feature, you can enter into trades and manage orders directly from the trading chart;
Built-in reports. To evaluate the effectiveness of your trading system, there is an automatic analysis, which is carried out according to the following indicators: the number of transactions, profit expectation, profit factor, average profit and loss;
Timeframes. There are 21 timeframes available in MT5, which gives you more choice of working period for your strategy. By default, only the main ones are on the toolbar. By calling the context menu, you can add the timeframes you need to the toolbar;
Quote charts. Charts are required for technical analysis. They allow you to monitor changes in quotes online and quickly respond to changes in the market situation. In MT5, you can open up to 100 charts at the same time, as well as change their display to a broken line, bars or Japanese candlesticks. At the same time, you can change the color scheme and scale, impose various indicators or graphic elements on the chart - in general, do everything to make your work convenient and comfortable. All performed manipulations with charts can be saved to templates for quick restoration of the workspace in the future;
Built-in MT5 indicators. The MT5 trading terminal contains several dozens of built-in ones developed by professional traders. They can be placed both in separate subwindows and directly on the chart. At the same time, an unlimited number of technical indicators can be installed on one chart. The difference from the MT4 trading terminal is that in the MT5 trading platform, you can overlay one indicator on another, getting smoother indicator data;
Free access to custom indicators. If the built-in indicators are not enough for you, then you can download MT5 indicators absolutely free of charge by going to the "Code Base" (or "Library") tab at the bottom of the MetaTrader 5 platform screen, and you do not need to install them in the trading terminal, they will be automatically copied to the custom indicators folder when downloading;
Updated MetaEditor for creating indicators and Expert Advisors. If you have at least a little programming knowledge, you can independently develop indicators for MT5 in a specialized MetaEditor. It was specially created for the MQL5 language, which is based on C ++, which makes the work of Expert Advisors even faster than in the outdated version of the MT4 trading terminal. The MQL5 language is object-oriented, so it is enough to have superficial programming knowledge to create Expert Advisors. The built-in debugger in MetaEditor will allow you to find errors in the program code at the stage of its development;
Strategy tester. After creating your own Expert Advisor or purchasing a new trading Expert Advisor, you can backtest it before launching it on a live account. Read how to test Expert Advisors in the MT4 Strategy Tester;
Built-in economic calendar. For the convenience of trading, there is a built-in MT5 that displays the time of the release of the news, the currency that is affected by this news, the name of the economic event, the priority of the news, as well as the current and previous value of the indicator and its forecast. Optionally, you can add economic events directly to the chart using the context menu so as not to miss the release of important news;
Trading signals. If you do not have good knowledge for successful Forex trading, you can subscribe to successful traders. To do this, go to the "MQL5 Signals" tab, select the signal provider you are interested in and subscribe. Starting from this time, transactions of a successful trader will be automatically copied to your trading terminal;
Alerts in MT5. In order not to be at the computer monitor around the clock waiting for a new signal to appear on your trading system, you can set alerts - sound notifications about the occurrence of a trading event. As a sound signal, you can select a standard melody or use your own audio file, specifying the path to its location. In addition to displaying an alert on a computer screen, you can configure it to come to your email address or mobile phone;
Glass of prices. A new feature has been added to the MT5 trading terminal - Depth of Market. It allows you to receive reliable information about the real market price and volumes of trade orders. The Depth of Market can also be used as a scalping tool, placing pending and market orders with one click. In addition, the Depth of Market displays a tape of deals in the form of a tick chart, where red and blue circles indicate deals to sell or buy, and the size of the circles shows the volume of deals made. To call the Depth of Market, you need to execute the appropriate command in the context menu of the Market Watch;
Market. More recently, a new Market tab has become available in the MT5 trading terminal, with which you can purchase licensed trading robots and other software applications, as well as download magazines dedicated to trading;
Virtual hosting. If you trade with the help of an adviser or copy the trades of the best traders, then you need to ensure the smooth operation of the trading terminal. This option can be enabled in MT5 by registering at http://www.mql5.com/ and entering your account details in the trading terminal. Unlike conventional virtual hosting, MT5 is distinguished by the proximity of its servers to your broker, as a result of which it is possible to minimize delays when sending orders from the trading terminal to the broker's server;
Mobile trading. Thanks to you, you can make trading operations anywhere in the world. On the official website of the company, you can download MetaTrader 5 for Android, iOS, iPhone or iPad absolutely free of charge.
Disadvantages of the MT5 Trading Platform
Despite all the advantages of MetaTrader 5, it was not without its drawbacks:
The MetaTrader 5 trading platform has low system requirements and can run on any operating system: Windows, Linux or Mac. Novice traders will appreciate its intuitive interface and a huge number of built-in technical indicators. Experienced traders will be interested in trading on stock market without opening an additional account, as well as the ability to analyze trading systems thanks to built-in reports. Forex trading through the MT5 trading terminal does not require any special skills or special skills. Understanding the fundamentals of the foreign exchange market and having it is all that is needed for successful Forex trading.
Hello fellow Forex traders! Today we will discuss very important, but sometimes overlooked by traders, principles of order execution in Forex. We will talk about the cases in which orders are displayed on the interbank market, what is the Depth of Market, at what prices pending, market, stop-loss and take-profit orders are executed, as well as a little about liquidity aggregators.
How FX works
First, imagine a regular market. When buying something on the market, you have two options: buy the item at the seller's price or try to bargain to bring the price down. In the first case, you are guaranteed to receive the goods at the stated price. In the second case, you can get the product at a better price, but you can also walk away with nothing. Fundamentally, the execution of orders in the forex market is no different.
In fact, a trader needs to distinguish between only two types of orders - with and without slippage limit. In the first case, you express a desire to buy only at the stated or better price. In the second case, you literally tell the broker that you are ready to buy the declared volume at any price available at the moment.
In terms of MT4, these are analogues of Instant Execution (Immediate execution) and Market Execution (Market execution). When an order is filled at a different price than the requested price, slippage occurs. That is, slippage is considered to be the difference between the price set in the order and the actual price at which the order was executed. As a result, your order may either be executed exactly at the stated price, or with some slippage in one direction or another.
Order book
In simple terms, the Forex order book is a table that contains current buy and sell orders from different liquidity providers. The order book is unique for each financial instrument and contains bids (bids) and offers (asks). Spread is the difference between the best Bid and Ask prices. Market sell orders are always filled at best price Bid, and buy orders - at the best Ask price.
Each price in the glass corresponds to a certain volume. Let's say you have submitted a buy order for 20 lots and there are only 10 lots at the best price at the moment. In this case, a part of the order will be executed at the best price, a part at the next one, and so on until the entire volume specified in the order is filled. The trader in this case will receive slippage, and the opening price will be equal to the average execution price in the order book.
Aggregators and slippage
Let's take an example of how the simplest liquidity aggregator works. Each broker works with several counterparties (liquidity providers). Each counterparty provides quotes at which he (possibly) will be ready to make a deal. Having sorted quotes from the best price to the worst one, the broker forms a glass of orders (market slice), where each counterparty is represented by two prices: buy and sell.
Many traders, when choosing a broker and account type, do not attach due importance to how orders are executed, although for many trading approaches and strategies this can be the cornerstone of future success. So below it is explained in detail how market execution differs from instant execution, when and how transactions enter / do not enter the interbank market, on what basis the accumulation of orders is formed, why the price after the order is placed may differ from what the trader sees in his trading platform and much more.
We will also touch on the topic of liquidity aggregators, which for the most part are present stage development of the Forex industry act as counterparties for the positions opened by traders. In this regard, the features of their work, which must be taken into account in your trading, will be considered.
How the Forex market works
To make it clearer how Forex works, you first need to understand that, despite its specifics, this is still an ordinary market. The goods here are currencies, and the participants are the same sellers and buyers. And here it is allowed not only to buy products at set prices, but also the opportunity to bargain, trying to get the best value.
Trader on foreign exchange market It is extremely important to become familiar with two types of orders - those that fill with slippage, and others where the execution occurs strictly at a given price - without deviation.
For the first of these cases, the term "Market execution" (Market Execution) is used, and for the second "Instant execution" (Instant Execution). The key difference between them is that during market execution, slippage occurs when the actual price of opening / closing a position differs, sometimes very much, from the numbers that were at the time the order was given to execute the transaction.
To understand why this happens and what type of execution to prefer - instant execution or market execution, you need to understand how pricing occurs on any exchange, including Forex.
Exchange glass with orders
If a in simple words to explain what a market glass with orders is, it can be depicted as a table with one column, many rows and a border in the middle, which separates the limit orders placed below at certain prices for buying (bid or bid) and from above for selling (ask or ask). There can be a distance between the best buy and sell price, which is called the spread. On the real exchange the spread can be zero, that is, it will not exist at all. The same situation occurs for the most popular currency pairs, for example, EUR / USD and some Forex brokers, but in this case, the trader usually always pays a certain commission.
It should also be taken into account that if you want to make a deal right now, the trader will buy at the best ask and sell at the best bid. Both of these prices are always displayed in the order execution window in MetaTrader4 or any other terminal. The main problem is that there may not be the required volume at the bid or ask price. For example, a trader wants to buy 30 lots of GBP/USD, and at the best ask price, at that moment only 8 lots are worth. This means that at the time of the execution of the transaction in full volume, the trader will first buy out 8 lots at the best ask, then the missing volume will be taken at the next price. In moments of weak liquidity, the volumes in the order book can drop sharply, so the execution of the required volume in the transaction can greatly change the price, which in the end will appear as the arithmetic average of the collected quotes.
The screenshot above shows that if a trader wants to buy GBP/JPY with a volume of 20 lots, he will first pay the spread between 134.378 and 134.426, then he will buy 10 lots at 134.26, take another 5 lots at 134.428, and the missing 5 lots for even more the worst price, which is not even visible in the glass. This phenomenon is called slippage, and every trader must understand that in such a situation, the purchase price of 20 lots cannot be 134.426 (the best ASK).
Liquidity aggregators and slippage mechanism
Understanding the basic parameters of slippage, let's now look at how most modern brokers work. Each of them usually cooperates with several liquidity providers or aggregators. Their role is usually played by large banks offering different prices. Based on these prices, the broker forms a glass of orders, setting the volume provided to him by affordable prices. Moreover, the best ask can be from one aggregator, and the best bid from another.
In MetaTrader 4, there is no way to see the order book, so speculators only look at the ask and bid prices. At the same time, the counterparties themselves are fighting among themselves for presence in the order book, narrowing the spread. This happens because a wide spread in comparison with competitors will not allow the aggregator to receive a large number of orders for execution, since other opponents will “instruct” it in front of it.
With this in mind, the question naturally arises. If individual providers strive to provide better prices by narrowing the spread and seeking to take more volume, then where does slippage come from. The fact is that all pending orders that form the liquidity of the order book are stored on the server, and the broker itself never knows which of the suppliers the deal will go for execution, since at the moment the order is activated, the order goes to the counterparty that offered the best one at that moment price.
Now let's imagine that the trader placed a stop order at the price of 9 (see the screen above). As soon as the price reaches this price, the broker sends an order for execution at the best price.
However, it takes time to send a signal and receive confirmation of the execution of the transaction. Let it take a fraction of a second, but even in such a short period, the price manages to change during high volatility, therefore, having received an order for execution, the counterparty will execute it at the best price, which at that time, for example, will no longer be 9, but 11. Then there is in this case the slippage will be 11-9=2 pips and it will not be anyone's fault that the trader will get the worst price as it is an objective market mechanism and that is how it works.
Now let's take a closer look at market execution, instant execution, what is the difference, to make it easier to choose the type of account.
Trades without slippage in Instant Execution
But brokers, in addition to market execution, always have Instant Execution, that is, instant execution of an order at the stated price. Here it is no longer necessary to take into account the time required to send an order, since the broker guarantees the readiness to execute the entire volume at the specified quotes. The problem is that if the price changes a lot, then the broker will simply not physically be able to fulfill his obligations, and in this case he will refuse to execute. This phenomenon is called a requote, and the trader will receive the message “No prices” when trying to make a deal.
In order to improve the possibility of trade execution and not get requotes, a trader can set a deviation in execution. That is, the broker will see if the price deviates within the limits that the client has set as acceptable, then the transaction will be executed.
The above screenshot shows that the trader has set a maximum deviation of 10 pips. Accordingly, if the broker sees an opportunity to execute the transaction within the tolerance, then he will do it. If not, then he will issue a refusal and in some cases may offer the possibility of execution at new prices, and the trader will decide for himself whether they suit him or not.
If the transaction is approved by the brokerage company, then information about it will be displayed on the chart in the terminal.
Trades without requotes with Market Execution
In the case of Market Execution, the trader actually agrees to be executed at any market price. He is warned about this in the trade execution window.
In this case, no matter what happens, the trader will not receive requotes, since the broker will fulfill its obligations in 100% of cases and will send an order to the counterparty who will fulfill it. However, it should be understood that in the case of increased volatility, liquidity decreases, so the trader does not have the opportunity to limit slippage.
However, now some brokers offering ProECN accounts provide an opportunity to limit slippage due to additional settings. In the end, this turns out to be even better than what Instant Execution offers, but the risks of slippage during the release of very important news remain due to the very mechanism of market execution.
Classification of applications for A book and B book
Continuing to consider the specifics of the execution of transactions with different brokers, you need to study the classification of A booking and B booking. The fact is that some brokers display all transactions exclusively for counterparties (A booking). Others bring together those who want to buy / sell within their server (B booking). Still others use a hybrid model, which first searches for a counterparty within the broker’s own system among its clients, and if one is not found, then the transaction is sent for execution to one of the liquidity providers.
There is a misconception that the hybrid model is not completely honest with customers, but this is not at all the case. The broker takes an active position, which allows him to earn more, but the traders themselves do not suffer from this, if we are not talking about the "kitchen". The company identifies large and consistently earning traders, providing them with the best execution with direct access to counterparties. If the broker sees that the client is working unprofitably in small amounts, then it is easier for him to reduce transactions within his server.
In addition, companies that have high liquidity inside can instantly execute multidirectional transactions of their clients, as a result of which the broker does not share its profits with liquidity providers, and the traders themselves receive ultra-fast processing of the application, which also cannot but rejoice.
That is, with B booking, the speed of execution will be maximum, and in the case of A booking, the time delay, albeit very small, can in certain situations greatly worsen the final price.
Pending or limit orders
A pending order is actually a regular order with a pending activation period. That is, it stands and waits for the price to approach, as soon as the quotes touch it, the broker will send an order for execution, which again will take some time, but not always.
In MT4, there are two types of limit orders - these are stop orders and limit orders. The first one consists of a buy stop and a sell stop. The second one is buy limit and sell limit. The fundamental difference between them is that in the case of a limit order, the transaction is executed instantly at the declared price, while in the case of a stop order, the transaction is concluded in the usual way.
Stop loss, as the name implies, also belongs to the stop order class, that is, in fact, it is just a pending reverse order placed as opposed to the current deal. If a trader places a stop loss below the buy price, then at the moment of triggering, a sell trade is executed. As a result, if at the moment the quotes reach the level of setting the stop order, an application for its execution is sent, and the price deviates strongly at that moment, then as a result, the stop can strongly “drag” through the order book, and the loss will be greater than that which the trader initially allowed.
In the case of limit orders, the deal is negotiated in advance, so the slippage factor does not play a negative role here. Moreover, in some situations, the final price may even be better than the declared one!
The Take Profit format order is just a prime example of a limit order. That is, as soon as prices approach this order, it will begin to be executed with a limit that will not allow you to miss a single point of profit.
Wrapping Up the Order Execution Review
Thus, giving preference to one type of Forex order execution, a trader always makes a choice - guaranteed execution without requotes, but also without exact compliance with the stated price. Or, with the risks of getting a refusal, but without critical deviations of quotes from the specified parameters.
What do the concepts - Market Execution and Instant Execution mean? What is better to choose: market or instant execution of protective orders? These questions are asked by most novice Forex traders. Let's take a look at what it is and how it works, after which you can determine for yourself what is best.
The system of instant execution of protective orders - Instant Execution
The term itself from English "" is translated as instant or instant execution. But, first of all, it must be said that Instant Execution is simply the way orders are executed, and the presence of this name in the characteristics of brokers does not always indicate that your orders will be executed really instantly.
Although most brokers flaunt this translation, and also claim that Instant Execution trading orders are executed really instantly, but in reality everything looks completely different.
We note right away that the execution system has nothing to do with speed at all.. The speed here is completely determined by the broker with its honesty and dealing policy, and the execution system is the principle that brings you into the market.
In other words, "Instant Execution" in the understanding of brokers is translated as follows: - "exact execution" - the market broker undertakes, according to the Instant Execution system, to execute your order either at the price displayed on your chart when you activated the "Sell" or "Buy" commands or not execute it at all. Let's take a closer look at the ongoing process with an example.
Let's say that at 16:20:07 you activated the "Buy" button under the condition of EUR/USD 1.47069. From the broker you receive a program message: “Order accepted”, then “Order in execution” will be displayed. What does this mean? This means the following: the broker has started processing your request and is making an attempt to withdraw your transaction to the Forex market itself.
This process takes some time, which varies between 0.5 - 25 seconds. During this period, some changes may occur with the price, it may go down, up, or it may not change. Let's consider what happens for each option separately, when the order is executed according to the Instant Execution system (strictly exact execution) at a price of 1.47069.
If the price does not change during this time, then your order is executed according to the one you requested, i.e. 1.47069. When the price goes down, the broker has the opportunity, in addition to the spread, to earn on the price difference, as well. can buy cheaper than you requested. Therefore, it will fill the current order at the requested price, i.e. 1.47069.
We note right away that in cases where the price moves against you very far, the broker most likely will not execute such an order.
When the price goes up, it is completely unprofitable for the broker to execute your order, since this market price is worse than you set. In such cases, the broker rejects the order, and you receive a price change message from him, the so-called "requite".
If we talk about pending orders, then the Instant Execution system has many of its own nuances here, but there are so many of them that it makes no sense to describe them.
We only note that at the time of a strong price gap, when the price jumps over your StopLoss or order, it may not be executed, executed with slippage, or executed at the price you declared, everything will depend on the broker.
Video: Market Execution and Instant Execution. We analyze market and instant order executions
System of market execution of protective orders Market Execution
In fact Instant Execution and Market Execution are a principle that brings traders to the market, and not a system that affects the speed of processing your requests. If we translate the term “Market Execution” literally, then we get “market execution”. But sometimes, as practice shows, brokers working with Market Execution execute orders faster, unlike those who use the Instant Execution system.
Brokers who use Market Execution generally execute orders not at prices displayed on their charts, but at those that exist on the exchange at the time of their execution. We note right away that these prices can be not only the best, but also the worst in comparison with the one that you observed on the chart by pressing the “Sell” or “Buy” buttons. Let's take a closer look at an example of how the Market Executions system works.
Let's say at 14:20:19 you activate the "Buy" button under the condition of GBP/USD 1.65283. The actions of the broker in this case are identical to the actions when using Instant Execution, i.e. he informs you that "Order accepted" and then "Order in execution." And this means that the broker processes your request and issues a trade to the market. At this time, the price may remain the same, go down or go up.
— If the price does not change, then your order will be executed at the already requested price, i.e. 1.65282.
— If the price goes down by a few points (let's say 8) and is 1.65203, then the order will be executed at this price again (1.65203), and not at the one you originally planned.
- If the price goes up and amounts to, for example, 1.65362, then again your protective order will be executed at this price.
As you can see, the market execution of protective orders (according to Market Execution) implies the execution of orders in any case, regardless of the price behavior.
Advantages of the system for instant execution of trading orders using Instant Execution
When using the Instant Execution system, traders have the opportunity to set the "StopLoss" and "TakeProfit" parameters at the same time as submitting orders.
For those for whom it is very important to enter the market at a specific asking price, or if this is not possible, then not to enter at all, you should choose the Instant Isikyushn execution system.
Scalpers, and especially those who jump into abnormal market movements, will only use Instant Execution, because. Execution of orders not at predetermined prices can negatively change the mathematical expectation of the entire system.
Disadvantages of the Instant Execution system
The main disadvantage of the Instant Execution system are <= узнать подробнее , i.e. slippage, which occurs during sharp price movements when a trader tries to close a trade. If you set Stop orders, then you will not be afraid of requotes and transactions will be closed at clearly defined prices set in advance.
The trouble with requotes for traders here is that such tools do not allow you to quickly close losing trades. After that, it only remains to close requests and exit at current (unfavorable) prices, or wait for more profitable changes, which happens very rarely.
In cases of too fast market movement, the number of requites can increase dramatically and a situation arises when traders cannot enter at all on their own signals. According to statistics, the average number of requotes can fluctuate in the range of 1-20% of the total number of orders placed. If the market is calm, then they are practically absent.
But it also happens that positive slippage occurs, although most brokers tend to close transactions at the prices requested by traders. An ideal option for closing trades without any slippage.
Ask how is this possible?
If you trade using trading advisors and need to execute orders at precisely formed prices (in Instant Execution), then you need to use accounts with 4-digit quotes and . Let's be honest, you won't be able to completely avoid requotes, but there will be much fewer of them.
To significantly reduce the number of requites when using the Instant Execution system, it is quite possible to set the maximum price deviation.
To do this, do the following steps in the trading terminal:
Menu => Tools => Settings => Trade => Deviation.
Or you can do it differently, in the window where you open a new order, specify - "Use the maximum of the deviations from the requested price." But doing all this, you should take into account that in these circumstances you lose the whole point of using the Instant Execution system.
When using the Instant Execution system, really fast execution can occur under the following conditions:
- work of a broker without intermediaries,
- excellent communication channel directly with the broker
- and the broker has a dedicated communication channel with Forex.
Benefits of the Market Execution System for Protective Orders
For traders, for whom the very fact of entering the market is important, and not the accuracy of the entry, the Market Execution execution system is the best fit. Also, this system (its very logic) enables brokers to quickly process all kinds of customer requests and display them in Forex.
Also, brokers with this order execution system are suitable for systems with a large spread and mathematical expectation, because. for them, the nuances of entry are practically irrelevant; they are not interested in the accuracy of the input.
In addition, using Market Execution is quite convenient for those traders who open positions under any circumstances, and requotes that offer new prices for transactions will no longer pop up.
Disadvantages of the Market Execution System
Here, the disadvantage of the Market Execution system is, paradoxically, its advantage is the execution of the order according to the current price, i.e. market execution. Various situations happen on Forex (abnormal volatility, etc.), so traders' orders can be opened both with big profits and not with less losses.
The next drawback of the system is the inability to specify the “StopLoss” and “TakeProfit” parameters when sending an order to the broker. The reason for this is that it is not known in advance at what price your order will be executed and, as a result, whether your "StopLoss" and "TakeProfit" will be within the limits of the allowable Stop/Limit level. Therefore, initially you are required to open an order, and only then you can modify to set "StopLoss" and "TakeProfit".
There are vane types of systems that are practically insensitive to what price a deal will be opened at (a little worse or a little better). For such systems, the very fact of discovery is much more important, because they are built on a whole series (series) of transactions, the break of which can completely disrupt the system. Therefore, the inability to open orders with the preset parameters "StopLoss" and "TakeProfit" greatly slows down the entire trading process, because. you have to do everything manually.
We have considered two systems of executing orders in MT4— Instant Execution and Market Execution, learned what it is and how it works, what advantages and disadvantages these systems have, and now you can determine for yourself what is right for your trading strategy and which broker to choose.
Finally, we want to say that today we conditionally distinguish two kinds brokerage companies – applying execution of orders by Market Execution and using mixed execution.
Companies that give their clients the opportunity to choose between the Instant Execution system and the Market Execution system include:
"", "LiteForex", "", "", "Roboforex" and some others.
Here you can choose which type of order execution would be preferable for you.
Market Order Take Profit
Recently, scalping has become increasingly popular among traders. However, this type of trading depends not only on the individual abilities of the trader, but also on the type of account, as well as on the type of order execution. Let's take a closer look at the issue of order execution. There are two types of order execution: market execution and instant execution, what should you choose for more comfortable scalping? To answer this question, you first need to figure out what principle instant and market execution work on.
Instant execution
If you literally translate this phrase, then instant execution means “instantaneous execution”, however, this is not entirely true. As a rule, in practice, an order with this type of execution is opened on average in 3-6 seconds, as you might guess, this is not such an instant execution either. For brokers, this type of execution is usually attached to accounts with a four-digit quote. Let's delve deeper into this issue. If you use Instant execution, then the broker undertakes to execute your order at the price that you specified, if at the time of opening the order the price differs from the one you have chosen, then such an order will not be executed at all, but instead a window will appear informing the trader about the price change (requote). That is, the trader always has a guarantee that his order will be executed at the price he specified.
Main advantages: The main advantage of this type of execution is a fixed spread for all trading instruments. If a trader definitely needs orders to be executed at the price he specifies, then Instant execution is just what you need.
Main disadvantage: The main disadvantage of Instant execution is the appearance of so-called requotes (when the broker does not have a suitable price at the time of opening an order). Usually, they appear at the moment of increasing the level of liquidity in the market, often revotes can often be found during the release of important news.
Market execution
This term means “Market Execution” of an order. Often, orders with this type of execution are opened several times faster than with the Instant execution type. There is always a possibility that, when executing a trader's order, the broker will open it not at the price that was directly indicated, but at the price that was on the broker's server at the time of opening. That is, in fact, a trader can specify price A, but the order will open at price B, which can differ significantly, both for better and for worse. In practice, this phenomenon is called slippage.
Key Benefits a: Market execution guarantees that your order will definitely be opened, it will happen instantly, in addition, there will be no requotes.
Main disadvantages: Paradoxically, the advantage of Market execution is its main disadvantage. Namely, the moment when the order will be opened not at the stated price may be such that the deviation will reach 15-20 points.
So, what should a scalper choose? If it is important for a trader that his order be executed without fail, regardless of the price, then Market execution should definitely be chosen. For trading on the news, this type is not suitable. If the exact price of order execution is the most priority, then Instant execution should be selected, then there will be a guarantee that orders will be opened at the specified price or not executed at all.
Which broker to choose?
Highly good conditions with Instant execution is provided by Aforex broker. Typically, Standard accounts have this type of execution along with four-digit quotes. For Market execution, the Roboforex broker is the best fit, namely an account of the Market Pro type. Often, with this type of execution there is a five-digit quotation, with a small floating spread.
