Slippage control (cancelled by dealer)
Order execution in ECN accounts is designed in a way that provides super-fast execution as well as excludes any dealer intervention in the process. However, these significant advantages might possibly cause adverse high slippage in rapid-moving volatile markets.
A Client placed 0.26 lots SELL STOP order AUD/USD at 1.01912 (marked in red), at 4.30 AM server time.
On the chart at 4.30 AM we see a large candle (fig. 1).
A Client placed a SELL STOP order at 1.01912. The above figure shows, that the order is placed between the High and the Low price levels of the candle at 4.30 AM server time. Because of a news release at 4.30 AM the price made a sharp move down with a significant GAP in the Price Flow. The Client's pending order fell into this price Gap. The order was supposed to be executed at the next available price. The difference between estimated and actual transaction price is called Slippage. To protect Clients from high slippages, we have introduced a mechanism that compares the Client's Order price with the best price at which this order can be actually executed. If the difference exceeds the maximum allowable slippage value, the execution process is terminated and the Order is rejected. The rejected order is seen in the Account History tab with the corresponding comment “cancelled by dealer” (fig. 2).
The comment “cancelled by dealer” is generated automatically by platform software without any dealer intervention in the process, due to the fact that ECN is a non-dealing desk.
The maximum allowable slippage value may vary depending on the level of market volatility at the moment, when a Client initiates an Order from his terminal. The maximum allowable slippage value is defined by a company.
The slippage control mechanism applies to Market (Buy and Sell) Orders, as well as Pending Sell and Buy Stop Orders. Stop Loss and the automatic orders liquidation according to the Stop Out procedure are executed at the best available price and the actual price may differ considerably from the order level or the calculation data, according to the Stop Out procedure.
Related Articles
Slippage control (cancelled by dealer)
Order execution in ECN accounts is designed in a way that provides super-fast execution as well as excludes any dealer intervention in the process. However, these significant advantages might possibly cause adverse high slippage in rapid-moving ...Glossary
A AML ― Anti Money Laundering, a set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions. Appreciation ― a currency is said to "appreciate" when its price increases against a specific currency ...Trade History & Trigger History
The history of trade operations is displayed on the Account History page. The History page contains the history of trade operations on the account and trigger history.Select the period for which the transaction history is displayed using filters at ...Positions and Orders
Positions tab: Displays the current positions on marginal accounts (for Gross and Net accounts). Assets tab: Displays the current balance of assets (for Cash accounts). Orders tab: Displays pending orders awaiting activation (for Gross, Net, and Cash ...Portfolio
Portfolio provides an overview of all your assets and pending orders. Here you can: Track the balance of assets on your trading account on the Assets tab (for Cash accounts). View, modify and close open positions on the Positions tab (for Margin ...