Market Execution vs Instant Execution - Which One is Superior?
Forex brokers have the capability to configure MetaTrader platforms. The trade server whether MT4 or MT5 can be configured by the broker to process trade orders in two methods namely instant execution or market execution. They make decision on which configuration to use. Just as the name suggest, instant execution configuration execute orders instantly without being influenced by the market condition. Most MT4 platforms uses instantly execution configuration. On the contrary, the market execution is designed to give you the next best price that the broker offers when you order sell or buy. These are the only two configuration that MetaTrader uses and have different advantages and disadvantages as we shall discuss below.
Slippage Control
These two order execution configurations shows different varying ability to control slippage. Ability to control slippage is a very important feature that every Forex trader takes very serious. With instant execution, the trader is able to control slippage significantly on the market orders. This is done by specifying maximum tolerated pips deviation either from ask price or bid price. The trade is rejected if the MetaTrader is unable to fill execute within the deviation. On the contrary, market execution does not allow slippage control and the trade will be executed using the next price that the broker offers. Slippage control is also essential for a scalper who strives only a few pips profits; discover more about scalping method in forex scalping strategy.
Requote
The instant execution configuration sends a requote message whenever a trade is rejected. The trade is only rejected when the MetaTrader cannot execute the order within the specified deviation allowed by the trader. In case of market execution, no requote message is returned and the server proceeds to execute the order at the next best price offered by the broker. The broker can slip the trade even by more than 10 pips since there is nothing that stops it from doing that. Yet, there is a broker that runs "no requotes" policy in their MT4 platform; read the information about this broker at TradingPoint review.
Stop Loss And Take Profit Orders
The design of market execution configuration does not allow the trader to specify stop loss and take profit orders. Besides, this configuration does not allow the trader to set SL and TP orders when placing new trades. The trader is only allowed to add SL and TP orders after opening the trade when the price for the new position has been established. On the contrary, the trader is allowed to set SL and TP orders when using instant execution. Unlike in the case of market execution, the trader is not required to modify the existing trades in order for them to add new stops and profit targets.
Varying Executed Prices
Varying execution prices are used under market execution configuration. This is disadvantageous as the price can move against the Forex trader. For instant execution, the executed price is exactly what you click hence there is reduced level of risk. Unlike under market execution, the server MetaTrader server does not wait for the price provided by the broker.
Conclusion
First, it is very important to understand the type of configuration that your broker allows since they have full control of this. Most MT4 platforms uses instant execution configuration. Brokers which are known to use this type of configuration include Alpari micro/classic, Forex.com, FXDD, and Fx Pro, while market execution is used by MB Trading, Go Markets, FXCM, InterbankFx, PFG Best, and Axitrader. Although all of them are reliable, market execution puts you at a greater risk as you are forced to accept everything that you broker offers even if it is a raw deal. On the other hand instant execution works with all currency pair and you cannot accept quotes offered by your broker if it is different from the market quotes.
Questions and Answers
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