Market Execution Vs Instant Execution – Which One Is Better?
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. This greatly depends on their decisions. 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 one of the most important aspects that every Forex trader is looking for. With instant execution, the trader is able to control slippage significantly on the market orders. He can do this simply by specifying the maximum pips deviation from bid price or ask price that he can tolerate. A trade is automatically rejected when MetaTrader cannot execute the order when the specified 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 crucial for a scalper who aims only several pips profits; discover more about scalping method in forex scalping system.
Requote
Whenever the trade is rejected under instant execution configuration a requote message will be sent. 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. In this case, the broker is allowed to slip trade by massive margin even more than 10 pips because there is no control. Yet, there is a brokerage that runs "no requotes" policy in their MetaTrader4 platform; read the details about this broker at Trading Point details.
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 market execution only allows traders to add SL and TP orders after the trade is open when the price of the open position is known. In contrast, the instant execution configuration allows for SL and TP orders. Unlike under market execution, a trader cannot modify his existing trades when setting new stops and profit targets.
Varying Executed Prices
Varying execution prices are used under market execution configuration. It is a big disadvantage because prices can move against the trader without control. 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. Instant configuration is mostly common with MT4 platform. 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. Likewise, instant execution is best for all currency pairs and it does not force you to accept quotes that your broker offers if it is different from the market quote. Here's my instant-execution suggested broker with 0.9 pip fixed spread: LoyalForex review.
