Forex and Cryptocurrency Orders

Orders will be priced in the currency your account is held in. A full quotation is made up of 2 prices called the Bid and the Ask. The difference between these two prices is referred to as the ‘spread’. This is the price a trade will be executed at when entering a long position on a currency pair. When quoted, the currency bid price appears to the left-hand side of the quote.

A Forex ask price is the price at which the market is prepared to sell a currency pair. This is the price a trade will be executed at when initiating a short position on a currency pair. When you sell a currency pair, you are essentially selling the base currency and buying the quote currency.

For example, (ignoring the bid-ask spread to simplify matters) if you buy the AUD/USD pair and are a resident of the UK, if the AUD/GBP pair is trading at 0.5555, you order will be priced at £0.5555 for every Australian dollar that you buy.

Commodity, Index, and Bond Orders:

Like currency pairs, prices for CFDs are quoted as a spread. When you initiate a long position on the underlying asset and expect prices to go up, your buy price (i.e. the ask price) represents the entry price for a market order.

In the case of a pending order when you go long, the limit or stop buy price entered on the order ticket represents the entry price for the CFD. Conversely when you go short, your sell price (or the bid price) is the entry price for the CFD in the case of a market order. For a pending order when you go short, the limit or stop sell price entered on the order ticket is the entry price for the CFD.

The margin currency for many CFD products is the US Dollar. The price in your local currency is determined by converting the US Dollar amount into your local currency. Stop loss and take profit levels are set on the order ticket in the designated currency for the respective CFD and are activated when these price levels are reached. One issue that can affect the price at which we are entered in a trade is slippage.

Prices can change very rapidly which can mean that when entering the market, sometimes between clicking to place the order and the order being received by the trading platform, the price may no longer be available. In this circumstance you will be filled at the next available price. Under certain market conditions this could mean that you are filled at a significantly worse price than expected.

Slippage is more likely to occur when trading around scheduled news announcements, such as non-farm payrolls, or if there is unexpected news, such as a terrorist attack or a natural disaster.

Slippage can impact both the trade entry and the trade exit. For this reason, it is advised to understand when major news is due to be released so this can be factored into your trading decision. Slippage can also occur when markets ‘gap’ i.e. the market closes overnight or over the weekend and opens at a different level to which it closed at.

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