What is Trade Execution?
Execution
Forex Trading Glossary
Quick Answer: Execution covers how orders are routed, filled, and confirmed, with latency, liquidity, and broker model determining quality.
What is Trade Execution?
Execution is the process of routing, filling, and confirming an order in the market. High-quality execution minimizes slippage and ensures trades occur at intended prices.
Execution Factors
- Broker model: ECN/STP, A-book, or B-book influences routing.
- Latency: Time between sending the order and receiving a fill.
- Liquidity: Depth of market affects slippage and spreads.
- Order type: Market, limit, stop, and routed variants behave differently.
Optimize Execution
Use limit orders during normal conditions, switch to market orders only when speed is essential, and test brokers with demo and small live accounts.
Best Practices
- Monitor slippage: Track fills relative to quoted prices.
- Use VPS: Host automated systems near broker servers.
- Stay informed: Avoid trading during known liquidity holes unless planned.
- Document issues: Keep records to escalate with your broker if fills degrade.
Related Terms
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