Rules of order execution
Software which allows you to create and send orders to execute trading transactions as well as control and manage open positions is called a platform. A client’s command to make a transaction is called an "Order".
There are several types of orders:
1. "Market Order" is a client’s command to buy or sell a financial instrument. Execution of this order results in the immediate opening of a trading position.
2. "Pending Order" is a command to buy or sell a financial instrument in the future at a specified price. This order is used to open a trading position when quotes reach a certain level. Pending Orders can be of the following types: Buy Limit, Buy Stop, Sell Limit, and Sell Stop. A Pending Order can be followed by Stop Loss and Take Profit orders, which are automatically attached to the open position when a Pending Order is activated.
3. "Stop Loss" - this order is intended to control and minimise losses, when the price of a financial instrument moves in an unprofitable direction. This type of order is always connected to an open position or a Pending Order. To check whether conditions of this order are met for long positions the Bid price is used, and for short positions the Ask price is used.
4. "Take Profit" is an order, which is the opposite of a Stop Loss and intended to make a profit when the price of a financial instrument reaches the desired level. Just like a Stop Loss, a Take Profit order is always connected with an open position or a Pending Order. The function is similar to Stop Loss orders: to check whether conditions of this order are met for long positions the Bid price is used, and for short positions the Ask price is used.
Conditions of Order Execution
The quality of the clients’ order execution is the top priority for RoboForex. The conditions are as follows:
1. A financial instrument is sold at the Bid price and is bought at the Ask price. The Bid price is used to open a short position, the Ask price a long one. The difference between the Ask and Bid prices is called "spread".
2. "Market Execution" mode is used for all types of accounts.
3. The time of order execution is not more than 0.5 of a second (unless the market conditions are different from normal conditions).
4. Buy Limit, Sell Limit, and Take Profit orders are executed at the price specified in the order. Buy Stop, Sell Stop, and Stop Loss orders are executed at the Bid and Ask prices, specified in the contract.
5. To open a position, a customer must have funds in their Live account. These funds are called free margin; the size depends on the leverage.
6. A client must maintain the margin level on his trading account at or above the required level. Otherwise, opened positions will be closed automatically.
7. The margin level is the ratio of equity to margin expressed as a percentage. Margin level equals (Equity / Margin) * 100.
In order to learn more please read the Best Execution Policy.