Read this guide and learn more about execution in FX trading

In Forex trading, execution of orders is a very important thing. To say it in the simplest way possible, the order execution is at what price you are selling or buying a certain currency pair. In the world of Forex, execution is video into two types, Market and Instant executions. Market execution means that the trader is ready to buy the currency at any price available, and the instant execution, you are only willing to buy currency at a specified price.

In today’s guide, we are going to discuss execution in more detail and will try our best to help you learn more about it and the differences that are between market and instant executions. So, be sure to read our guide carefully to understand everything better.

Instant Execution explained

In the case of Instant Execution, as we have already noted above, the order is executed exactly at the indicated price or may not be executed at all because of the changes during the process of placing the order. In this case, orders will not be opened or closed without the consent of the investor, which means that there is a chance of requites taking place. Generally, it is something that beginners usually like to use, because it seems to be a lot safer for them.

What about Market Execution?

Market ExecutionThis one is totally opposite to the Instant Execution. Generally, it is a lot faster and the order execution with this one is always guaranteed. So, no matter how much the prices change, the orders will still be opened. However, in the case of high market volatility, there are some chances for slippages to occur.

This means that order will be executed but it will happen with a new price. This does not necessarily mean that the price will be higher, it can be both, higher and lower. But, investors always have the opportunity to close the order with a profit, and those whose priority is to open a position will most likely use Market Execution.

So, say that investors want to buy a pair of EUR/SUD, and opens the position to buy one. During the processing, there is a big chance that the price might increase decrease. In the case of Instant Execution, the broker will send a requote with new quotes, and the trader will have the chance to decide if he wants to buy the pair at the price or not. On the other hand, during Market Execution, the transactions are made immediately without needing confirmation from the trader.

What are the biggest differences between these two?

In the case of instant executions, the time of orders can take 3 to 5 sends. For market execution, it will need much fewer times. Those who Instant Execution will also receive requotes and those who use Market Execution will not. In addition, if you are using Instant Execution, it will depend on the market a lot and the price is also provided by the broker, and when it comes to Market Execution, the execution is guaranteed and the price is provided directly from the market.

One thing that makes most people use Market Execution is that in this case, traders have the ability to use a number of different trading strategies, while those who use Instant Execution are very much limited in this case.

Generally, the biggest benefits of using Market Execution is that the broker handles it a lot faster, however, you might end up buying a currency at a price that you did not plan. This is especially scary to do in case there is something abnormal going around the world when the pries can be changed in just a few seconds out of nowhere.

Which one should you use?

The one that you will end up using mainly depends on your needs and wants in the world of Forex. If you are a beginner, it would be better to start trading with Instant Execution. Generally, it is regarded to be a lot safer to do so, since you are in control more than you would be by using Market Execution, but at the same time, the thing is that in the case of Instant Execution, it is the broker who controls the price, and not the market itself.