Execution Slippage, Requotes & ECN Brokerage

To navigate the forex market professionally, you must understand how orders are routed. The structure of your broker determines your execution quality.

1. Broker Models * **Market Makers (Dealing Desk)**: The broker takes the opposite side of your trade. They create a synthetic market and control spreads. They can suffer from **requotes** (refusing your trade price and offering a worse one). * **STP (Straight-Through Processing)**: Orders are sent directly to the broker's liquidity providers (Tier-1 banks) without dealing desk intervention. * **ECN (Electronic Communication Network)**: The gold standard. The broker matches your order with other participants in a massive interbank pool. Spreads are raw (often 0.0 pips), but you pay a fixed commission per lot.

2. Slippage Slippage is the difference between your *requested price* and the *executed price*. It occurs during high-volatility events (like NFP or FOMC news) or when liquidity is thin. * **Positive Slippage**: Your trade fills at a better price (frequent on ECN buy limits). * **Negative Slippage**: Your trade fills at a worse price (common on market orders during news).

3. Spread Expansion During major news events or rollover hours (5 PM EST), liquidity providers pull their orders. This causes spreads to widen dramatically. Avoid trading during these times unless you have an advanced news strategy.