The speed at which a forex broker executes the order of their clients matters a lot in forex trading. This is because timing is everything in the forex market. In this article, we will explain how a forex broker execution speed can affect a trade.
WHAT IS A FOREX BROKER EXECUTION SPEED?
A forex broker execution speed is how much time it takes for a broker to execute the orders of a trader. Like you may already know, all retail traders have to go through a forex broker to trade the forex market. If a trader wants to buy or sell a commodity, they place the order on the platform provided by the broker, the broker approves of the trade before it can be executed. Note that there are a lot of forex traders under a single broker, and as such, there are a lot of orders to be executed at the same time. It is the broker’s responsibility to make sure that all of these orders are executed within the shortest time possible.
THE PROCESS OF FOREX ORDER EXECUTION BY BROKERS
When a trader clicks the enter button, they usually do not understand what goes on after wards. Come to think of it, it is not the trader’s business to bother about what happens after an order has been placed; it is the broker’s business. However, if the trader can understand how these orders are executed, he or she will have a better advantage in trades as to what time it takes, and more importantly, what to expect.
The truth is that it takes some time, depending on the nature of the trade, before a trade can be executed. Here are some of the reasons why it is so.
1. THE TRADER DOES NOT HAVE DIRECCT ACCESS TO THE ONLINE FOREX MARKET:
Many traders seem to think that they have a direct access to the forex market because they can view charts and some other things that are going on live in the forex market. The truth is that when it comes to trade actions like buying and selling commodities, the broker gives it a pass after confirming that the size of the order is available. If the order s not available, it might take some time to be filled out.
2. THE TYPE OF ORDER SUBMITTED:
How long it takes for an order to be executed also depends on the kind of order the broker submits. The kind of attention a limit order gets might be different from what is obtainable in the case of a market order. Whether it is a long term or short term order also plays a role on how fast an order can be executed.
3. THE KIND OF BROKER EXECUTING THE ORDER:
Brokers that are serious about business will do everything possible to attend to the orders of their clients, unlike in the case of brokers who honestly do not have the interest of their clients at heart.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.