What it does
It executes immediately against the best available price. You are guaranteed to get in; you are not guaranteed the number you saw. In normal conditions on a major pair the difference is negligible. In fast conditions it is not.
Slippage
The gap between the price you clicked and the price you got. It happens because the market moved between the two, and it can go either way, though in practice it tends to be against you when it matters most, because the moments prices move fastest are the moments everyone is trying to trade.
When it is the right tool
When being in the trade matters more than the exact entry: exiting a position, entering on a signal that has already triggered, or trading an instrument tight enough that a fraction of a pip is irrelevant.
When it is not
Seconds around a major economic release, at the Sunday open, or on a thin instrument. Those are the times slippage is largest, and a limit order gives control back at the cost of possibly not being filled.
In short
| Guarantees | Execution |
|---|---|
| Does not guarantee | Price |
| Risk | Slippage in fast markets |
| Best for | Exits and normal conditions |
Common questions
Why did I get a worse price than I clicked?
The market moved between your click and the fill. That is slippage, and it is normal in fast conditions. If it happens constantly in quiet conditions, that is worth raising with the broker.
Can slippage be in my favour?
Yes, and some brokers pass it on. Whether yours does is worth checking, because a broker that gives you negative slippage but not positive is charging a hidden cost.
Is a market order the same as instant execution?
Broadly yes, though some platforms distinguish between market execution, which fills at whatever is available, and instant execution, which asks you to confirm a requote if the price has moved.
Trading forex and CFDs on margin carries a high level of risk. Most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade.