How Orders Execute
A trading strategy helps you achieve your trading goals. But to carry out your strategy, you need the right tools. FXCM offers simple and complex orders, which can be customized to meet your trading needs. Knowing how each order executes is the key to an effective strategy.
A Market Order lets you enter the market immediately. You control at what price the order executes, and if you are comfortable with “partial fills,” through Order Type and Time-In-Force settings:
- Market Range – when your strategy is sensitive to price execution
With Market Range, you determine a comfortable range of prices in pips where your order can execute. If your order can execute at a price in your range (based on available liquidity), it does; if not, it cancels.
- At Market – when your strategy is more sensitive to full order execution than price
At Market provides execution certainty because you aren't limiting the order to specific prices: You simply want to enter the market at the best available price(s).
When the current market price isn't suitable for your strategy, an Entry Order lets you enter the market at some time in the future. You specify a price above or below the current market price. If the market price reaches your entry price, your order attempts to execute as an At Market Order.
- Limit Entry Order – you buy below or sell above the current market price
- Stop Entry Order – you buy above or sell below the current market price
Stop Entry Orders guarantee execution but do not guarantee the specified price. Limit Entry Orders only execute at the entry price or better. If the best available price at the time of execution is not at the entry price or better, the order resets and waits for execution.
- Range Entry Order – A Range Entry order executes similarly to a stop entry order; however, you are able to enter a range (in pips) of negative slippage from the entry price that the user is willing to accept on the order. The range will not limit positive slippage.
Once triggered, the order will attempt to fill at the best available price within the prescribed range. If the order cannot be filled entirely within the prescribed range, it will not execute and will remain pending on the account.
Once the market moves back within the prescribed range the order will again attempt to execute, subject to available liquidity.
Remember that Range Entry Orders do not guarantee execution, making order types an important consideration in any trading decision.
STOP AND LIMIT ORDERS
Your strategy may require you to cut losses or take profits at a certain point. Stop and Limit orders execute similarly to Stop and Limit entry orders (see above), but get you out of the market, rather than in. Limit Orders guarantee the specified price (or better), while Stop Orders guarantee execution, but not a particular price.
Depending on your order type, each order offers time frame options in which this order executes:
- Day – activates your Entry Order for the current trading day only
Day Entry Orders cancel automatically at 5 pm ET (New York).
- GTC (Good ‘Til Canceled) – ensures that your entire order is executed
GTC orders may be broken up into partial orders if sufficient liquidity isn't available to fill the entire order at the best available price.
- IOC (Immediate or Cancel) – fills as much of your order as possible at the best available price
If the entire order cannot be filled at the best available price, the remainder cancels.
- FOK (Fill or Kill) – when you want your entire order filled at the best available price
If the entire order cannot be filled at the best available price, the entire order cancels (no partial orders).
TIMEFRAME: COMPLETION OF TRANSACTION
FXCM endeavours to process orders within milliseconds; however, there is no exact time frame for order processing.
STAGES: COMPLETION OF TRANSACTION
When a client makes an order, FXCM first verifies the account for sufficient margin. The order is then matched against quotes from liquidity providers. A hedge order is then sent to the liquidity provider for execution. Finally, the client's order is filled and open/closed positions are updated.
EXCEPTIONS: COMPLETION OF TRANSACTION
There may be exceptions to the typical transaction, such as delays due to abnormal order processing or malfunctions with internal or external processes. In such cases, FXCM notifies clients as quickly as possible, depending on the complexity of the issue.
FXCM's objective is to notify customers about these types of exceptions as quickly as possible, but the time for notification sometimes depends on the complexity of the issue under review.
- Trading station: if abnormal market order processing occurs, the order will be highlighted in red, and the "status" column will indicate "executed" or "processing," in the "orders" window. In these instances, the order is in the process of being executed, but is pending until FXCM receives confirmation from the liquidity provider that the quoted prices are still available. During periods of heavy trading volume, it is possible that a queue of orders will form. That increase in incoming orders may sometimes create conditions where there is a delay from the liquidity providers in confirming certain orders.
- Metatrader 4 (“MT4”): if abnormal market order processing occurs, the order window would remain open on the trading platform and reflect processing error. In these instances, the order is in the process of being executed, but is pending until FXCM receives confirmation from the liquidity provider that the quoted prices are still available. During periods of heavy trading volume, it is possible that a queue of orders will form. That increase in incoming orders may sometimes create conditions where there is a delay from the liquidity providers in confirming certain orders.
Learn more about Market Order types on Trading Station.