What is a Requote?

What is a Requote? A requote in the Forex world means that the broker you are dealing with is not able or willing to give you a trade based on the price you entered. Generally, this happens in a fast-moving market, usually around the time of a big news announcement or some shock to the system.

What is a Requote

You decide to buy or sell a currency pair at a particular price and press the button to execute the trade. When your broker gets the order, the market will have moved too fast to perform at the advertised price. The requote announcement on your platform lets you know the price has moved and allows you to decide whether or not you are willing to accept that price. It is almost always a price worse than the one you ordered.

This is why reputable brokers ask you first before executing the trade. Generally, requotes are bad for you and suitable for the broker. It is not always an outward attempt to charge you more, but it can be. Most of the time requotes happen on huge trades, not to an average trader.

What is a Requote?

The more direct your trading is, the less likely you will receive a requote. Individual traders usually use small brokers; those brokers serve as proxies for larger brokerages, which means the orders take more time to get from the trader to the actual sale, which can create the need for requotes. If your broker cannot execute the order immediately, there can be significant price variations, even in one minute. Brokers that do not run charges immediately are called market makers.

They often have a “market” or “please wait” indicator on your screen’s buttons for buying and selling. Market makers should, in theory, provide in both directions, positive and negative, but this rarely happens. Instead, most cases of requotes are at the trader’s expense, another reason traders should remain on alert and strongly consider whether they want to use a market maker.

What is a Requote?

If, when you received a requote, it was explained that there was a price change between when the order was made and when the server received it, perhaps it would make traders less uncomfortable or suspicious of their brokers.   Requotes are a part of any Forex trading experience, so you can expect to encounter them occasionally.

It becomes a matter of concern when requotes occur regularly in quiet markets. If you are upset by frequent requotes, it might be a reason to switch brokers. You can then begin to search for a no-requote Forex broker. It is strongly suggested to use an ECN brokerage to avoid a time lag that might cause requotes. If your broker has an electronic communications network (ECN), trades will reach the servers quicker, reducing requotes dramatically.

What causes Forex requotes? – What is a Requote

As mentioned above, the markets usually move very quickly, but they can drive even more dramatically when the news is announced. This makes it difficult for the broker to place the order at your requested price. In addition, the broker you are dealing with has brokers they sell with.

The liquidity pool, or broker’s brokers, can pull orders, raise the prices, or even refuse to acknowledge anything if they want to. Your broker finds that the available price isn’t the one you asked for – and it warns you that you will get a worse fill than you wanted. Some markets are much more prone to requotes than others. These markets are more volatile and have rapid price fluctuation.

What is a Requote?

Since a requote means that your broker cannot provide the trade at the price they originally quoted, it is essential to determine the reason. If the reason for your requotes is that the specific market is volatile and there was a news announcement that affected this already volatile market, it is much more justifiable than if the reason for your requotes is that your broker neglected to put in the order when you made it. Technology can help reduce the time lag that can cause requotes, so ensure your broker has the most up-to-date technology possible.

How to protect yourself from a requote – What is a Requote

With a solid Forex broker, protecting yourself from a requote is easy. By placing a limit order, you tell your broker that you are only willing to place an order at a specific price or better. By doing this, you are telling them ahead of time that you are not willing to pay more for the trade than this special price and are ready to sit out on the work if it can’t be done in these parameters.

What is a Requote

You can set a minimum profit level, called a take profit level (or a TP), guaranteeing you the profit level you want even if the price varies. You can use these to gain a higher profit margin than your original market order. Knowing exactly what you expect the currency you hold to do is extremely helpful in setting these TP levels.

What is a Requote

Stop losses can be set before the trade as well.   Different stop-loss orders exist. You can use the one that best suits your trading and risk management approach. Automated stop-loss orders can be less efficient, but they are an option to consider. These can help to prevent requoting but will make it possible for a trader to stop hunting, which is part of the risk.

If you are using MT4, you might be able to check a box that allows you to “Enable maximum deviation from the quoted price.” This is a way to prevent requotes, but you risk losing the trade if it deviates more than you chose but still would be worthwhile.

What is a Requote?

It is pretty common to find requotes during the Non-Farm Payroll report. When this report is released on the first Friday of the month, it is one of the most significant movements in the Forex market. If the information deviates from the expectations, it volatile the Forex market. These changes make it much more likely to receive a requote from the average Forex broker. So give your broker a break – every broker is swamped at times like these.

What is a Requote

Avoiding trading at times like these can help you to avoid Forex broker requotes. Major regulators are also doing their best to prevent market maker brokers from using requotes to exploit the trader. If traders are concerned about a scam in the form of requotes, it’s best to inform the authorities, who can closely monitor the issue.

What is a Requote

The best market makers manage to limit the number and frequency of requotes even though they are dealing in the more volatile areas of the Forex market. They can be connected to the most advanced technology and liquidity providers possible. As long as your broker is preventing the requotes as much as they can, you can give them the benefit of the doubt and continue trading confidently.

What is a Requote?

3 Responses to “What is a Requote?”

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