Requotes on the Forex market – are repeated requests made by a brokerage company for confirmation of orders execution under new prices. Most frequently, requotes appear in the following case:
A trader opens an order under the specified price, but the market fluctuates and prices change rapidly. Due to the delay in order processing or due to the sharp price fluctuation a brokerage company fails to open/close a transaction under the order’s price and sends another request – requote with a new price – for a trader’s confirmation. In case new prices are unsatisfactory for traders, they can cancel this transaction. That means that requotes are necessary to ensure the correct compliance with the rules of orders execution under the exact price in the Instant Execution mode.
Most often, Forex requotes appear when orders are executed under the Instant Execution system. Such type of execution is typical for the trading accounts with a fixed spread. The main task of requotes – is to ensure orders execution under the previously specified prices and prevent any uncontrolled slippages.
There are also some negative factors of trading with requotes — it is impossible to close a transaction immediately in the event of a strong down trend. Forex is characterized by sudden shifts of quotes against the background of economic and political news, and in 50% of such cases deviations will certainly not be in favor of traders. So, when the price goes down, losses start increasing rapidly and a broker doesn’t allow closing a transaction but sends requotes with new prices. Logically, in such situation a trader can accept any price level in order to close a transaction and save their capital, but a broker sends new notifications with requotes and they keep losing money.
In order to trade on Forex under the Instant Execution system, MetaTrader platform presents a possibility to set some acceptable deviations of the price. So, if the price deviates from the set-out level, a trader will not receive any requotes and all orders will be executed under the new prices without trader confirmation. In case there is a sharp turnaround in prices that exceeds the acceptable deviation, a trader will start receiving requotes for accepting or canceling their transactions.
This function makes it possible to significantly reduce a number of requotes and sometimes even eliminate them at all.