Honestly, it is better if you do not experience certain things in the forex market. One of those things that are best to be avoided are the requotes. In this article we will tell you what requites are, why they occur, and how they can affect your trading.
What are requotes?
Requote is the difference between the price at which you decide to open a trade when you click on the buy / sell button and the price your broker is opening that trade.
Requotes are not always an attempt by a broker to deceive you.
Firstly, requotes can be a kind of risk management tool, if your position is too large (lots of lots), then the broker may ask you to repeat the price request to make sure that you really want to open a trade with such a large volume.
Secondly, usually requites pursue big players who trade large volumes and not small traders trying to earn a few bucks with their mini lots during the release of important news. In general, the broker gives you the opportunity to think twice before you commit on opening a potentially risky deal.
When do requotes usually happen?
When you press the buy / sell button, you can pop up a window with requotes (the price that will differ slightly from the original price). The broker thus informs you that the price has changed, and if that does not suit you, then you can refuse the deal. If you are satisfied with the price, then you repeatedly press the buy / sell button.
Generally, the price is always worse for you from the original price. It is especially unpleasant if you are trying to close your trade with a profit and in front of your eyes you see how your profits are melting.
What is slippage?
There is not need to worry too much. Usually, requotes occur only in volatile markets. And thus you can face another unpleasant thing of the Forex market, which is best to be avoided – slippage. A broker has the right to execute your transaction in the market at the price that he has and call it slippage.
But honest brokers can warn you that if you continue to send a request for opening a deal, then your transaction will be opened, but at a price that is worse for you. If your broker constantly has requotes and cannot clearly explain the reason for it, then you should think about moving to another broker.
But remember, most brokers do not try to deceive you with the help of requotes, they earn enough on spreads and losses.
How to avoid requotes?
If your broker likes you and you are confident about it, but sometimes irritated by requotes, then it is a very simple way to avoid requotes. Firstly, you need to put pending orders and for opened trades- stop loss and take profits.
Thus, you let your broker know that you are interested in a certain price and no other. That is, you tell the broker the price, and if he cannot give it to you, then you will not open a trade at all. You are not interested in the transaction at any other price.
Requotes are quite common in the Forex market, if you are trading during an important news announcement ( for example, Non Farm Payrolls). In such case, let requotes not surprise you. But, if the market is calm, and you cannot open or close a trade due to requotes, then this is a signal that you need to change your broker.