A market order is a type of order that buys and sells at the current exchange rate without specifying the rate. When you need to purchase or sell anything right immediately, this is the tool you use. Also referred to as “market ordering.”
You will quickly contract (= that the transaction is created) if you put an order (= place an order) when you wish to ride the market flow immediately or close the position you hold.
When a market order arrives at the Forex company’s server, it is processed and filled at the prevailing rate (the rate at which you may actually trade) at the time of processing. Because the rate displayed on the order page when placing an order is merely the current rate, it is impossible to predict how much the market order will be executed for. There may be a substantial discrepancy between the prevailing rate at the time of ordering and the agreed pricing when the exchange rate is shifting rapidly.
“Slippage” refers to the discrepancy between the actual rate at the time of ordering and the negotiated rate, as well as the difference itself. If slippage happens that exceeds the established width by establishing the width of slippage that may be tolerated in advance, there is also an order technique that does not construct the order itself, depending on the Forex firm.
Separate order techniques that allow you to select an acceptable slippage width and basic market orders that are executed regardless of how many slippages occur are also available from Forex providers.
