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Posted on Feb 23, 2022 at 07:07 PM
Have you ever spotted a sweet entry worth several pips and tried to cop the profits, only for a trade requote to suddenly happen and mess it up? That 'shit' hurts better than a heartbreak! Continue reading to learn what a Forex requote is all about, how it happens and how you can protect yourself from it.
So, it's a really profitable day and everything is going really well for you in the 'Forex Analysis Department'...
In other words, 'you aff finish work' with your analysis on that currency pair all through the night and even gone as far as planning your Take-Profit price in advance!
Absolutely nobody (I mean nobody) was going to stop you from cashing out some decent profits—except God, of course.
So... There you are squatted before your PC or smartphone's MT4, rubbing your palms in sheer enthusiasm and licking your lips with the relish of the wads of cash that is about to hit you from the Forex Trading Lane... (See also: How I Made My First Million!)
You key in all your 'wonder' parameters, and hit the BUY or SELL button in preparation to hit the jackpot... But all of a sudden, a REQUOTE happens!
You don't believe your eyes—all these hour-long neck-breaking analyses for a fiasco?! God abeg.
Not believing your eyes, you attempt to enter the trade again and again but it's a requote each time. Then, you finally give up and resign to fate.
A Forex requote is a 'breakfast' served by the broker. It's a situation in which a broker is unable to execute your trade at your ordered price due to extreme market volatilities.
Therefore, you get that noisy, annoying sound from your MT4—prompting you to enter accept or reject the new price level.
You hit the BUY or SELL button to buy or sell a currency pair at a particular price, but due to the volatility of the market, the market moves too fast that the pair can no longer be executed at the originally displayed price.
Then comes the pop up on your MT4 informing you of this change in price and letting you decide whether to accept the price or simply 'look away'.
A SIMPLE ANALOGY: Take for instance that you own a petrol station and purchase bulk fuel at a really high price for resale—say 300 per litre. One thing led to the other, and the price of fuel suddenly drops.
You're presented with just one hard choice—bring down your selling price (i.e., requote your selling price) to the current market price to not drop out of the competition altogether. That's a requote.
Requote prices are almost always worse than your ordered price. This is why reputable brokers like Instaforex ensure to seek your consent first before executing the trade at the new price.
Unlike other popular markets (foodstuff, textile, etc.), prices move really fast in the Forex market and even dramatically faster during economic News announcements—especially the Non-Farm Payroll (NFP) Report. (Here's what a market surge looks like).
As a result of this, the broker finds it impossible to execute your order at your requested price and prompts you to accept or decline the order at a new price.
Although a requote is a delicious 'breakfast' served to almost all Dick and Harry in the Forex trading world, you can still dodge it acrobatically by doing the following:
Got more to add? Let me know in the comment below!
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