How to judge a broker's order execution.

You click Buy on EUR/USD at 1.10410 and the trade opens at 1.10430. Those 2 pips cost you money, and no fee line on your statement will show them.

Order execution is the step where your broker turns your order into an open trade. Judging its quality means comparing the trade you asked for with the trade you got, across many orders.

What happens between your click and your fill?

Your order travels to the broker's trade server, is checked and priced, and a confirmation comes back. The time this takes is latency, usually counted in milliseconds.

The market keeps moving during that time. A shorter round trip gives the price less chance to change before you are filled.

Part of the delay sits on your side: your internet connection and your distance from the server. MetaTrader displays your ping to the server in the status bar at the bottom of the window.

The rest happens at the broker. A dealing desk may review an order before accepting it, and a broker that routes orders outward waits for its liquidity provider, as the lesson on where prices come from explains.

In MetaTrader 5, the Journal tab logs each request and the broker's reply with times to the millisecond. The gap between the two is a rough execution time.

Speed matters most if you aim for a few pips per trade. A delay that would wreck a scalping plan barely touches a swing trade held for days.

How slippage works in both directions

Slippage is the difference between the price you requested and the price you were filled at. On a buy, a higher fill is against you and a lower fill is in your favour. On a sell, it is the reverse.

Take a buy of 0.50 lot of EUR/USD requested at 1.10410. One pip on 0.50 lot is worth $5.00, so a fill at 1.10430 costs 2.0 pips, or $10.00. A fill at 1.10400 saves 1.0 pip, or $5.00.

Slippage on its own is normal in a moving market. A fair broker passes price changes on in both directions, so your log should include some fills better than requested as well as worse.

The warning sign is slippage that almost never goes your way. If hundreds of orders fill at your price or worse and hardly any fill better, the broker may be keeping the favourable moves. The slippage lesson covers the causes.

Requotes, rejections and partial fills

A requote happens when the broker declines your price and offers a new one. You click Buy at 1.10250, a window offers 1.10270, and you must accept or cancel before it changes again.

MetaTrader has two common execution modes for forex. Under instant execution you can be requoted, and a deviation setting tells the platform how many points of difference you will accept.

Under market execution the order fills at the next available price. Requotes disappear and slippage takes their place.

A rejection is an order refused outright. Some causes are yours, such as too little free margin or a closed market. Repeated refusals with messages such as Off quotes during normal hours point to the broker.

A partial fill is an order completed in pieces. On accounts that pass orders to outside liquidity, a large order can be split across several prices, so check the average fill. STP and ECN execution explains that routing.

Measuring slippage from your own trades

A broker's advertised speeds are its own numbers. Your trade history is better evidence, provided you record the price you asked for.

For each market order, note the price on the button as you click, then read the fill price from your account history. Flag any order placed within a few minutes of a major news release, when spreads widen and prices jump.

Here are eight market orders on EUR/USD, each 0.50 lot, with illustrative prices. Positive slippage is in your favour.

1. Find each gap. On a buy, slippage is requested minus filled. On a sell, it is filled minus requested. Order 2: 1.10410 minus 1.10430 = -0.00020, which is -2.0 pips.
2. Add them: 0.0 - 2.0 - 1.0 + 1.0 + 0.0 - 3.5 - 0.5 + 0.5 = -5.5 pips.
3. Convert at $5.00 per pip: -5.5 × $5.00 = -$27.50, about -$3.44 per order.
4. Set the news order aside. The other seven total -2.0 pips, or -$10.00.

Two orders filled better than requested and four filled worse, so slippage did run both ways. One news order caused 3.5 of the 5.5 pips.

Eight orders prove very little, so keep the log going for dozens of orders and compare quiet times with news times. For other pairs, the pip value calculator turns pips into money.

Count requotes and rejections in the same sheet, as a rate per 100 orders. A rate that jumps whenever the market gets busy shows how the broker copes under pressure.

Why stop orders slip more than limit orders

A stop loss becomes a market order once price reaches it. It then fills at the next available price, which after a gap or in a fast market can be far from your level.

Say you bought 0.50 lot of EUR/USD at 1.10500 with a stop at 1.10000, a planned loss of 50 pips or $250.00. The market closes on Friday at 1.10200 and opens on Monday at 1.09700.

Your stop fills at the first price, 1.09700. The loss is 80 pips, or $400.00, which is 30 pips and $150.00 more than planned. No prices traded in between, so nothing was available at 1.10000.

A limit order fills at your price or better, although it may not fill at all if price only touches the level briefly.

Some brokers sell a guaranteed stop loss for an extra fee. The order types lesson compares how each order behaves.

Gaps are a feature of the market, so judge a broker's stops in ordinary conditions. There, a stop should land at its level or very close to it.

What good execution looks like

No broker can promise zero slippage, because prices move while orders travel. Fair execution tends to show these signs in your own records:

• Slippage appears in both directions, with favourable fills turning up regularly.
• Requotes and rejections are rare outside news releases and the weekly open.
• Fill times stay steady through the day and do not slow when you are in profit.
• Stops in quiet markets fill at or very near their level.
• The broker publishes an order execution policy explaining how it prices and routes orders, and what happens in fast markets.

Many regulated brokers keep that policy with their legal documents. Read the part on slippage to see whether price improvement is passed on to you.

A demo account is a weak test. Demo servers may fill orders at the price shown and skip the slippage and requotes a live account would meet, so a small live account gives truer data.

Execution also links to who takes the other side of your trade. A-book and B-book brokers face different incentives, and your own log shows how a broker actually behaves.

Keep learning

Chapter 1How to choose a forex broker.01To choose a forex broker, check four things before you deposit. Confirm the licence on the regulator's own register, work out the full cost of a trade from spread, commission and swap, test how orders are filled, and make a small withdrawal to see how payouts work. A broker that fails the licence check needs no further study.Chapter 1What does a forex broker actually do?02A forex broker opens your trading account, streams buy and sell prices, accepts your orders and fills them, either with outside liquidity providers or by taking the other side itself. It also holds your deposit, sets aside margin while trades are open, applies leverage, charges or pays swap and closes positions at stop out.Chapter 1Is your forex broker regulated? How to check a licence.03A regulated forex broker holds a licence from a government authority such as the UK's FCA or Australia's ASIC. To check it, find the legal company name and licence number on the broker's site, then search them on the regulator's own register and confirm the website and contact details match.Chapter 1Red flags of a fake or unsafe forex broker.04A fake or unsafe forex broker usually shows itself in a few ways: no licence or a cloned one, promises of guaranteed profit, pressure to deposit, payments to personal or unrelated accounts, bonus terms that lock your money, and withdrawals that stall or need a fee paid first. Check the regulator's register and test a small withdrawal.Chapter 1Who is on the other side of your forex trade?05In retail forex, the other side of your trade is usually your broker. Spot forex has no central exchange, so deals are made over the counter, and your trade is most often a cash-settled CFD with the broker. The broker may keep that risk, hedge it with a liquidity provider, or match it against other clients.Chapter 1How forex brokers make money.06Forex brokers earn from the spread, the gap between the buy and sell price, often widened by a markup they keep. Many also charge commission per lot and add a margin to overnight swap. A broker that takes the other side of your trade can also profit when you lose.Chapter 1A-book and B-book brokers explained.07An A-book broker passes your trade to an outside liquidity provider and earns from a markup or commission, so your win or loss does not change its income. A B-book broker takes the other side itself, so it gains when you lose and pays when you win. Many brokers use both.Chapter 1How A-book brokers earn, and what limits them.08A pure A-book broker passes each client trade to a liquidity provider, so it earns nothing from your losses. Its income is a markup on the spread, a commission per lot, swap markups and fees. Income per lot is small after routing costs, so the broker needs high volume, and it can only offer the prices its providers quote.Chapter 1STP and ECN execution explained.09STP, straight-through processing, means your broker passes your order automatically to outside liquidity providers and usually earns by widening the spread. ECN, electronic communication network, means your order meets prices from many participants in a shared order book, usually with a raw spread plus a commission. Both are labels, so check how your broker actually routes orders.Chapter 1Internalisation: how brokers net client orders.10Internalisation is when a broker offsets client buy orders against client sell orders inside its own books. Opposite trades cancel, so only the leftover net position is left to hedge or keep. This cuts the broker's outside costs and risk, while each client's contract stays with the broker, who remains the counterparty.Chapter 1Hybrid brokers and the C-book.11A hybrid broker sends some client trades to liquidity providers (A-book) and keeps others in house, taking the other side itself (B-book). Routing usually depends on account results, trade size, style and total exposure. C-book has no fixed definition; it most often means splitting one trade, hedging part and keeping the rest.Chapter 1Your broker's hedging policy and why it matters.12A broker's hedging policy decides whether you can hold a buy and a sell on the same pair in one account, and how much margin that pair uses. Hedging accounts keep both positions open; netting accounts close or shrink the first one. Margin on a hedged pair can be full, one leg or zero.Chapter 1Where your broker's prices come from.13Your broker's prices start as quotes streamed by liquidity providers, mostly banks and non-bank trading firms. An aggregator keeps the highest bid and lowest ask from these streams, and the broker usually adds a markup before the price reaches your platform. Different providers, markups and timing mean two brokers can show different prices at the same moment.