Forex brokers have the capability to configure MetaTrader platforms. They configure the trade server which is usually MetaTrader platforms whether MT4 or MT5 to handle market orders in either two ways namely market execution or instant 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. This is the most common type of configuration for market orders on MT4. 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.
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. A trader has high ability to control slippage on the market orders when using instant execution configuration. He can do this simply by specifying the maximum pips deviation from bid price or ask price that he can tolerate. The trade is rejected if the MetaTrader is unable to fill execute within the deviation. With market execution, there is no slippage control and the trade is executed at the next best price offered by the broker.
The instant execution configuration sends a requote message whenever a trade is rejected. The trade is rejected whenever the trade server is unable to fill execute the order within the maximum allowed deviation set by the Forex trader. Under market execution, the server proceeds to use the next price offered by the broker to execute the trade without sending requote message. The broker can slip the trade even by more than 10 pips since there is nothing that stops it from doing that.
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. In addition, SL and TP orders cannot be set at the moment when new trades are placed. 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. In contrast, the instant execution configuration allows for SL and TP orders. 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
The market execution configuration uses varying executed prices. It is a big disadvantage because prices can move against the trader without control. In contrast, instant execution uses exact execution prices significantly reducing the risk level. The trade server does not wait for the broker to set their best price for execution as it happen in the case of market execution configuration.
You should understand the type of configuration that your broker uses is very important because they have full control of this. Most MT4 platforms uses instant execution configuration. Examples of brokers that uses instant execution includes Forex.com, FXDD, Alpari micro/classic, and Fx Pro, while market execution is used by brokers such as Go Markets, FXCM, MB Trading, 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.
Instant execution could give you more advantages. It is best to see the details of an instant-execution broker with low fixed spread in Loyal Forex Broker. Then again, if you have more fund to spare, you should look into Dukascopy forex broker for a low ECN spread with instant execution.