[B]WHAT’S NEW?[/B] FXCM has enhanced its No Dealing Desk forex execution by adding Price Improvements to limit and limit entry orders. Now every forex order can receive positive slippage, as all orders fill with FXCM’s best available price.*
A common inconvenience to most No Dealing Desk execution models is that limit and limit entry orders always fill at the limit price—even if the market price gaps or spikes favourably through it. At the same time, stop orders can fill at a worse price.
With Price Improvements, limit, and limit entry orders can receive positive slippage. This means you can potentially make more money if the market gaps or spikes favourably through your limit price. This is especially true in situations where the market is moving fast (e.g., during weekend gaps or around news events).*
[U][B]HOW TO MAXIMIZE POSITIVE SLIPPAGE[/B][/U]
[U]Use Limit and Limit Entry Orders[/U]
FXCM recommends opening and closing trades using limit and limit entry orders in most cases. The benefit to these order types is that you are guaranteed to receive your requested price or better without receiving negative slippage. Remember, that although limit orders guarantee price they do not guarantee execution making order types an important consideration in any trading decision.
[U]Market Conditions[/U]
The most likely times to receive positive slippage will be around news releases, during weekend gaps, and generally during fast moving market conditions. Traders who prefer to trade in these market conditions, which are typically more volatile, should consider using limit and limit entry orders. This will ensure that if you enter into trades, you will only receive your requested price or better.*
[U]Trading Strategies[/U]
There are specific trading strategies and market approaches that may increase your chances of receiving positive slippage. The DailyFX course instructors cover a few of these trading strategies and provide a format for you to ask questions at our strategies web page. Forex Price Improvements | Positive Slippage | FXCM
- All Price Improvements are contingent upon available liquidity at execution.
[B][U]HOW TO MINIMIZE NEGATIVE SLIPPAGE[/U][/B]
When trading with market orders, FXCM recommends setting the order type to “market range,” to avoid potentially receiving negative slippage. A market range order type allows you to control the amount of slippage your order can receive when it executes allowing for price certainty (see image to the right).
A market range of “X” pips assures that all or part of your order will be filled within a “X” pip range of the current market price (“X” pips above or “X” pips below) if liquidity is available.
Let me know if you have any questions.