In the previous article, we explained how Forex orders are placed, from the moment a trader clicks Buy or Sell to the order being sent to the broker’s server.
However, placing an order is only the first step. What truly determines your real entry price — and ultimately your profitability — is how that order is executed.
This article focuses on order execution, a critical but often overlooked factor in Forex trading.
1. What Is Order Execution in Forex?
Order execution is the process that happens between the moment a trader places an order and the moment the trade is filled in the market.
Although it seems instantaneous, execution involves:
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Price availability
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Liquidity conditions
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Broker routing
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Server response time
Even a small difference in execution quality can significantly impact:
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Entry precision
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Risk-to-reward ratio
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Long-term profitability
For traders using Price Action, execution quality becomes even more important during trend continuation and pullback entries, where precision and timing directly affect risk-to-reward ratios.
👉 If you are new to order types, read:
Foundation #4 – Trend Strength, Pullbacks, and Continuation
2. How Forex Orders Are Executed Behind the Scenes
When you click Buy or Sell, the order follows this path:
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Order sent from MT4/MT5
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Broker server receives the request
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Order is:
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Filled internally (Market Maker), or
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Routed to liquidity providers (STP/ECN)
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Final execution price is returned
Execution delays as small as 100–300 milliseconds can cause price changes, especially during volatile conditions.
3. What Is Slippage?
Slippage occurs when a trade is filled at a different price than requested.
Example:
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Buy EUR/USD at 1.1000
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Filled at 1.1004
→ Slippage: 4 pips
Slippage can be:
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Negative (worse price)
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Positive (better price)
A fair execution model allows both positive and negative slippage, reflecting real market conditions.
4. When Slippage Happens Most Often
Slippage is common during:
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High-impact news events (NFP, CPI, FOMC)
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Low-liquidity sessions
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Strong breakouts
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Market orders during fast price movement
If your strategy relies on:
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Breakout entries
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Scalping
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Intraday momentum
execution quality matters more than raw spread size.
5. What Is a Requote?
A requote happens when the broker rejects your requested price and offers a new one.
This is common with:
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Instant Execution
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Dealing Desk brokers
Requotes are problematic because:
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You miss optimal entries
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Trades are delayed
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Price often moves against you
Professional traders generally prefer market execution, even with possible slippage, over requotes.
6. Market Execution vs Instant Execution
Instant Execution
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Fixed quoted price
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Requotes possible
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Less suitable for active traders
Market Execution (Preferred)
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Executed at best available price
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No requotes
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Slippage possible
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Reflects real market conditions
Most Price Action traders use market execution.
7. How Poor Execution Damages Trading Performance
Poor execution leads to:
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Worse entries than planned
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Stop losses hit prematurely
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Reduced reward-to-risk ratios
Over dozens or hundreds of trades, this creates:
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Strategy distortion
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False performance analysis
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Psychological frustration
Many traders blame their strategy when the real issue is execution quality.
8. How to Evaluate a Broker’s Execution Quality
You can assess execution by:
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Comparing demo vs live fills
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Monitoring slippage during volatility
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Checking execution speed
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Reviewing execution model transparency
👉 Traders who prioritize execution often choose brokers that:
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Use multiple liquidity providers
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Support market execution
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Allow scalping and news trading
(Example: brokers with ECN/STP execution and low average slippage)
🔗 Related: Broker Review – Execution Speed & Slippage Analysis
(In-depth review based on real trading conditions)
9. What Beginners Should Focus On
Beginner traders should:
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Avoid choosing brokers based only on bonuses
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Look beyond advertised spreads
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Prioritize execution transparency
Good execution allows you to:
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Follow your Price Action plan accurately
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Reduce emotional decision-making
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Measure real strategy performance
10. Conclusion
Order execution is not a minor technical detail — it is a core performance factor.
A solid Price Action strategy
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poor execution
= inconsistent results.
Next article in this silo:
👉 Execution #3 – Spread, Commission & Hidden Trading Costs Explained
