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If you have traded Forex or CFDs on a live account before, you have most likely dealt with a Requote before. Below we explain what exactly a Requote is and how it is created.
What exactly are Requotes?
When you open or close a position manually, the price moves between the moment you click on open/close the position and the moment the order arrives on the broker’s server.
Why are there Requotes
If there is a difference between the price you clicked on and the price that is available when the order arrives on the broker’s server, your Forex broker will send you a requote (re-quotation) in which the broker suggests a price at which you can buy or sell.
Are Requotes good or bad ?
That depends on the situation. If your broker suggests a better price than the price at which you actually wanted to buy/sell, the requote is of course advantageous. Unfortunately this happens very rarely. Usually most brokers will only suggest a different price if it is worse than the price you originally wanted. Good ECN or STP brokers simply pass on a better price to their customers and regulate this via positive or negative slippage. Requests from these brokers therefore usually only occur in the case of larger price deviations to the detriment of the customer, so that you can decide whether you still want to enter at this price or not execute the trade.
How can you avoid Requotes ?
- set a take profit before you open the position
Do not change this take profit afterwards. As soon as the price reaches the previously set take-profit, your position should be closed automatically.
- set a Stop Loss before opening the position
Do not change this stop loss afterwards. Even if the price is closer to your Stop Loss, as it marks the maximum loss you were willing to risk before the trade. If you trade with a reputable Forex broker, he will not fish out the stop. You can find an overview of all Forex brokers in our Forex broker comparison.
- if you use the Metatrader 4 (MT4) / Metatrader 5 (MT5), you will find a small checkbox there:
“Activate maximum deviation from the price”. If you want to close a position manually, you can check this box and specify the number of pips by which the price may deviate from the clicked price during execution.
- if you do not like any of the automated methods, you can only hope that the order will be executed at the price you clicked
However, our experience shows that the deviation between the clicked price and the execution price when trading with reputable brokers occurs in about 50% of all trades to the advantage of the client and 50% to the disadvantage of the client, and the ratio is therefore in the balance.
5. The last option to avoid a requote is
Wait until the market calms down and then open or close your position. If you trade with a reputable CFD broker, you should not get any Requotes here.
Beginners often make the mistake of chasing prices and wanting to enter and exit in all situations. Of course, it can happen that you receive requests more often and the impression arises that the Forex or CFD broker is trading against you. If you know that the price changes between the time you click on “Execute Order” and when you reach the server, everyone will understand that the price you clicked on may not be available anymore.
The moment you click on “Execute Order”, the click becomes a market order. This order contains a price at which the position will be opened/closed. If this price is no longer available, the broker will send you a counter-offer (request or re-quotation).
Our conclusion on Requotes
Finally, requotes can be both good and bad. On the one hand, you give them the opportunity to decide for themselves whether you want to accept the new price. On the other hand, if they come up too often, Requotes make reasonable trading almost impossible. If your Forex broker sends them requests too often, you may want to look for a new broker.
As a conclusion, you can note:
It would probably be more understandable if you received the following message instead of the message “REQUOTE”:
“The price has changed between the time you click on Execute and the time the order arrives on our server. The price you clicked on is no longer available. You can either set a Stop Loss / Take Profit or activate the Maximum Deviation and hope for the best”.
See my other articles about Forex Trading:
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- Forex Spreads & Fees – How Expensive Is Trading?
- Forex Trading Correlations for more profit
- Forex vs. Futures – Strong Differences In Performance
- How Much Capital Is Required For Forex Trading? – minimum deposit
- How to avoid requotes from your Broker in Forex Trading
- How to become a Forex Broker
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- Learn Forex Trading: Instructions & Guide For Beginners
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