What are Forex Requotes and How to Avoid Them

In the dynamic world of online trading, speed and precision are paramount. When you decide to enter or exit a trade at a specific price, you expect your order to be executed quickly and exactly at that price. However, sometimes, instead of your order being filled, your broker offers you a new price. This frustrating situation is known as a ‘forex requote’. Understanding what a requote is and why it happens is crucial for any trader, especially those new to the market or using certain types of broker execution models. Requotes can impact your trading strategy, profitability, and overall trading experience, making the requote meaning a vital concept to grasp.

What is a Requote in Trading?

A requote occurs in forex and other financial markets when a trader attempts to execute an order at a specific price, but that price is no longer available by the time the broker receives and processes the order. Instead of filling the order at the outdated price, the broker’s trading platform sends a notification back to the trader, offering a new price (either higher or lower than the requested price). The trader then has the option to accept this new price or decline it. If the trader declines, the order is cancelled, and the desired trade is not made. If the trader accepts, the trade is executed, but at a price different from the one initially intended.

Essentially, a requote is the broker saying, "Sorry, the price you requested is gone. Would you like to trade at this new price instead?" This mechanism is a direct consequence of the time lag between the moment a trader clicks ‘buy’ or ‘sell’ on their platform and the moment the order reaches the broker’s server and is executable in the underlying market. While this lag might seem negligible, even milliseconds can be critical in fast-moving markets where prices are constantly fluctuating. Therefore, the price displayed on your screen when you click might not be the same price available when the broker is ready to execute the trade. This discrepancy leads to the broker issuing a requote.

Why Do Requotes Happen? Common Factors

Requotes are not random events; they are typically triggered by specific market conditions and the operational mechanics of certain broker types. The primary reasons why requotes happen can be traced back to the speed of price movement and the broker’s execution model.

Market Volatility and Speed of Price Movement

The most common catalyst for requotes is a fast-moving market. Markets become volatile during significant economic news releases (like Non-Farm Payrolls, interest rate decisions, or GDP reports), major political events, or unexpected global incidents. During these periods, supply and demand dynamics can shift rapidly, causing prices to jump or drop sharply within seconds.

When you place an order during such high volatility, the price you see on your trading platform might change dramatically before your order reaches the broker and can be matched. If the price moves significantly against your requested level, the broker, especially those operating under a specific execution model, may be unable or unwilling to execute at the old price. This leads to the broker sending back a requote reflecting the new, current market price. Why requotes happen is often directly linked to trying to trade during these explosive price movements.

Broker Execution Model: Instant Execution

Requotes are almost exclusively associated with brokers that operate on an ‘Instant Execution’ model. In this model, when a trader places an order, they are requesting execution at a specific price displayed on their screen. The broker receives this request and attempts to ‘instantly’ fill it at that exact price. However, as discussed, if the market price has moved away from the requested price before the broker can confirm the trade, the broker cannot guarantee the requested price.

Instead of executing at a worse price without the trader’s consent, an Instant Execution broker will offer a requote. This gives the trader control – they can accept the new price or decline it. While this might seem beneficial as it prevents unwelcome price differences, it can also lead to missed trading opportunities if the trader repeatedly declines requotes and the price keeps moving. Brokers using the instant execution broker model are designed to execute trades at the explicit price requested by the trader, which is why requotes are necessary when that price is no longer viable.

Other Contributing Factors

While less significant than market volatility and execution model, other factors can contribute to the likelihood of experiencing requotes:

Internet Connection Speed: A slow or unstable internet connection on the trader’s side can increase the time it takes for an order to travel from the trader’s platform to the broker’s server, increasing the chance the market price will move in the interim.
Broker Server Latency: The speed and efficiency of the broker’s own trading servers can also play a role. Higher latency (delay) on the broker’s end means more time for the market price to shift.
Trading Volume: Extremely high trading volume can sometimes strain infrastructure and processing speed, potentially increasing the chances of requotes, though this is less common with major brokers.

Understanding these factors helps explain why requotes happen and highlights that they are a built-in feature of the Instant Execution model designed to protect both the trader and the broker from unintended price fills when the market price changes rapidly.

Requotes vs. Slippage: Key Differences and Broker Types

While both requotes and slippage involve your trade potentially being executed at a price different from the one you requested, they are fundamentally distinct mechanisms tied to different broker execution models. Understanding the difference between requotes and slippage is crucial for choosing a broker and developing your trading strategy.

What is Slippage?

Slippage occurs when a trader’s order is executed at a price different from the requested price, without prior notification or the option to accept/decline a new price. This usually happens because the requested price is no longer available in the market by the time the order reaches the liquidity providers.

Slippage can be positive (execution at a better price than requested) or negative (execution at a worse price than requested). It is particularly common with market orders (buy/sell at the best available price) or when limit/stop orders are triggered in fast-moving or low-liquidity conditions. Slippage in forex is a standard market phenomenon reflecting the simple fact that prices are constantly in flux, and execution depends on matching available buy and sell orders in the real market at that very instant.

The Core Difference: Notification and Control

The key difference between requotes and slippage lies in the process and trader control:

Requote: The broker notifies you that your requested price is unavailable and offers a new price. You have the choice to accept or decline. Your trade is not executed unless you accept the new price. Requotes are typical of Instant Execution brokers.
Slippage: Your order is executed automatically at the next best available price if the requested price is unavailable. You receive no prior notification and have no control over accepting or declining the new price. Slippage is typical of Market Execution brokers (like ECN/STP).

Think of it this way: A requote is like a shopkeeper telling you the item you wanted is sold out at the advertised price but offering it to you at a new, slightly higher price, and you can say yes or no. Slippage is like the shopkeeper just charging you the new price at the till without asking, because the price tag hadn’t been updated yet.

Broker Execution Models and Their Implications

The type of execution model a broker uses fundamentally determines whether you will encounter requotes or slippage:

Instant Execution Brokers: As discussed, these brokers aim to fill your order at the price you clicked. If that price is gone, they issue a requote. They provide price certainty at the moment you click but introduce the possibility of requotes and missed trades if the market moves. You trade directly with the broker, and they act as the counterparty or internal market maker.
Market Execution Brokers (ECN/STP): These brokers route your orders directly to liquidity providers (banks, other brokers, etc.). They execute your order at the best price available in the market at the moment the order arrives. They do not guarantee the specific price you see on your screen when you click, as they are not the counterparty setting the price. Because they prioritize speed of execution at the best available price rather than a specific requested price, they do not issue requotes. Instead, if the market moves, your order will be filled at the prevailing market price, resulting in slippage (positive or negative). Market execution broker models are favored by traders who prioritize getting their order filled over getting it filled at an exact, potentially outdated, price.

So, which type of broker is better for avoiding requotes? Simply put, market execution brokers (ECN/STP) are better for avoiding requotes because they eliminate the requote mechanism altogether. However, this comes at the "cost" of potentially experiencing slippage, which many traders find preferable to missing trades due to repeated requotes, especially in volatile conditions.

The Impact of Requotes on Your Trading Experience

Requotes can significantly impact a trader’s experience and profitability in several ways:

Missed Trading Opportunities: When you receive a requote, you have to decide whether to accept the new price. If the market is moving rapidly in your favor, and you decline the requote (or take time to consider it), the price may move even further, causing you to miss the entry or exit point you originally wanted. This can be particularly frustrating for scalpers or traders relying on precise entries.
Negative Price Execution: If you accept a requote, you are executing your trade at a price worse than your initial request (for example, buying at a higher price or selling at a lower price). Over many trades, this can erode your potential profits or increase your losses.
Trading Strategy Disruption: Some trading strategies are based on executing orders at very specific price levels. Frequent requotes can make it difficult or impossible to implement these strategies effectively, forcing traders to adapt or abandon their approach.
Frustration and Psychological Impact: Constantly receiving requotes can be highly frustrating. It can lead to hesitations, rushed decisions (accepting a bad price just to get into the trade), or even reluctance to trade during potentially profitable volatile periods.
Increased Transaction Costs (Indirect): While not a direct fee, trading at a worse price due to requotes is an indirect cost. It means you might have to risk more pips to achieve your target profit or end up with a smaller profit than initially planned.

Practical Strategies to Avoid or Minimize Requotes

While you cannot entirely control market volatility, there are practical steps traders can take to significantly reduce the frequency and impact of requotes:

Choose a Market Execution (ECN/STP) Broker: This is the most direct way to avoid requotes altogether. Market execution brokers, by their nature, do not requote. They prioritize filling your order at the best available price in the market, resulting in slippage instead of requotes. Research brokers thoroughly, focusing on their execution model. Understand that trading with ECN/STP brokers usually involves a commission per trade plus tight spreads, whereas Instant Execution brokers often have wider spreads but no commission. Consider which model aligns better with your trading style and priorities. If your primary concern is "How can I stop getting requotes when I trade?", switching to a market execution broker is the most effective answer.
Avoid Trading During Peak Volatility if Using Instant Execution: Since requotes are most common in fast markets, try to avoid placing orders with an Instant Execution broker just before or during major news announcements or other known volatility spikes. If you must trade during these times, be prepared for the possibility of requotes.
Use Pending Orders Strategically: While pending orders can still experience slippage in volatile markets (especially Stop orders), they often bypass the requote mechanism used for instant market orders. A Limit order to buy below the current price or sell above the current price will only be filled if the price reaches that level or better. A Stop order to buy above the current price or sell below the current price will be triggered at your specified level and then executed at the best available market price, likely resulting in slippage rather than a requote if the market jumps. Understanding these order types (Limit and Stop orders) and their execution characteristics is key to avoiding requotes.
Ensure a Fast and Stable Internet Connection: A reliable internet connection minimizes the delay between you initiating a trade and the order reaching your broker’s server. While it won’t eliminate requotes in highly volatile markets or due to the broker’s model, it removes one potential bottleneck.
Check Your Broker’s Requote Policy: Reputable brokers will have clear policies regarding requotes and execution. Familiarize yourself with how your specific broker handles orders in volatile conditions. Some platforms might have settings to automatically accept requotes within a certain price tolerance, though this carries the risk of unwanted price differences (though presented as an auto-accepted requote).
Trade During Less Volatile Periods: If your strategy allows, trading during calmer market sessions (e.g., parts of the Asian session or between major news events) can significantly reduce the likelihood of encountering requotes due to slower price movements.
Consider Tick Charts or Lower Timeframes (with caution): For scalpers, watching tick charts or very low timeframes (like M1) can give a slightly better real-time sense of price movement just before clicking, but this requires very fast reflexes and doesn’t negate the broker’s processing time. This technique is less about avoiding the possibility of requotes and more about attempting to time your click better with the fastest possible price. This is an advanced technique and can be risky.

Implementing these strategies, especially choosing the right broker execution model, can drastically improve your trading experience and help you avoid the frustration and potential costs associated with frequent requotes. Remember that avoiding requotes doesn’t mean avoiding price differences altogether; with market execution brokers, you trade requotes for the possibility of slippage, which is a different, but often more predictable, outcome for traders who prioritize execution speed.

Conclusion: The Importance of Understanding and Managing Requotes

Requotes are a reality for traders using Instant Execution brokers, particularly in fast-moving markets. They occur when the price requested by the trader is no longer available, prompting the broker to offer a new price instead of executing the trade at the outdated level. While seemingly simple, understanding requotes, why they happen, and how they differ from slippage is fundamental knowledge for any trader aiming for consistent execution.

The key takeaway is that the likelihood of experiencing requotes is heavily influenced by market volatility and, more significantly, the broker’s execution model. Instant Execution brokers use requotes as a way to ensure trades are filled at the exact requested price (or a newly accepted one), whereas Market Execution brokers (like ECN/STP) prioritize execution speed at the best available market price, leading to slippage instead of requotes.

By choosing a broker whose execution model aligns with your trading style and preferences, ensuring a stable trading environment, and employing smart trading tactics like using pending orders or avoiding peak volatility (if using Instant Execution), you can effectively minimize the impact of requotes on your trading. Making informed decisions about your broker and understanding the nuances of order execution mechanisms are vital steps on the path to becoming a more successful trader.

Researching and comparing different brokers based on their execution models, fees, spreads, and overall trading conditions is a critical part of this process. Finding a reliable partner that facilitates efficient and transparent trade execution is paramount. To make informed decisions about which trading platform suits your needs, exploring detailed broker reviews and comparison tools can provide comprehensive insights. You can evaluate brokers based on crucial factors like costs, available instruments, trading tools, platform features, regulatory compliance, security measures, and customer support quality. Accessing in-depth research and user feedback allows you to understand how different brokers handle order execution, including their policies on requotes and typical slippage experienced by traders. This due diligence helps you identify brokers that align with your trading objectives and risk tolerance. Learn more about finding the best trading platform for you. Explore Broker Reviews and Comparisons.