Advantages of a Fast Execution Forex Broker: True ECN Forex Broker

There are numerous advantages for a trader able to execute fast trades… At least, that it what we are told by so many brokers. Why do Forex Brokers advertise their fast execution speeds so rigorously? And are there actually advantages to fast trade executions? This article hopes to provide some insight into what benefits a fast execution broker can provide, when a trader might need such execution and when fast execution is actually a factor to consider when selecting a Forex broker.

The main advantage that fast execution provides is decreasing the risk of slippage. The time it takes for the order to be opened by a trader is known as latency. Within this time volatile price movements might occur due to market conditions. As such, a trade meant to be opened or closed at a certain price level, is unlikely to be processed at that price since some time has passed between the initial ordering of the trade and it finally being processed. Usually latency speeds are within seconds, some brokers offer latency speeds below one second (calculated in milliseconds), regardless of this, the risk of slippage is impossible to completely eradicate. Nevertheless, the lower the latency, the less time for slippage to occur and therefore the less risk involved. Slippage can be potentially quite costly, good brokers will spend time and effort trying to reduce this risk by investing in the technological infrastructure.

It’s worth noting that fast execution speeds are mostly an advantage when…

Source by Zeba M Warsi

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