Execution speed in forex is the time between you pressing the trade button and the market filling that order. In a market that runs 24 hours and where prices can move in fractions of a second, that time matters. Execution speed is measured in milliseconds (thousandths of a second) or sometimes microseconds, and it reflects how quickly your broker and trading system can route, process and confirm an order. Although the average retail trader won’t usually need microsecond performance, understanding execution speed helps you choose a broker, design a strategy, and manage the everyday risks of trading.
How execution speed works in practice
When you place a market order to buy or sell a currency pair, that instruction has to travel from your device to the broker’s gateway, possibly through a trading platform or API, then on to a liquidity provider or exchange, and back with a confirmation. Each of those steps adds delay. For example, imagine you click “Buy EUR/USD at market” because a technical breakout has formed. If the entire round trip takes 200 milliseconds, the price may have already moved; if it takes 2 seconds during a volatile news release, you could be filled at a price that’s materially different from the one you saw.
Two common outcomes linked to slower execution are slippage and requotes. Slippage happens when the order is filled at a different price than expected — it can be in your favor or against you, but most traders worry about negative slippage. A requote is when the broker can’t immediately fill your order at the displayed price and instead offers a new price; accepting the new price delays execution further and can mean missed opportunities.
How execution speed is measured and interpreted
Execution speed is often reported as an average time to fill, sometimes broken down by instrument or trading session. Firms may publish metrics such as average fill time, percentage of fills within 100 milliseconds, and distribution of slippage. For everyday traders, useful benchmarks are whether most orders are filled in under a second and how often slippage occurs during the trading hours you use.
Interpreting speed requires context. A 50 ms round trip matters to a scalper trying to capture a single pip, but it means little to a swing trader holding positions for days. Likewise, a broker that reports very low average latency may still deliver poor execution if their spreads are wide or they apply discretionary intervention. Execution speed is one piece of execution quality, not the whole picture.
Factors that influence execution speed
Execution speed depends on technical infrastructure and market conditions. The physical distance between your terminal and the broker’s servers adds network latency; traders in one region will commonly see different timings than those closer to liquidity hubs. The broker’s execution model also matters: straight-through processing (STP) and electronic communication network (ECN) models typically route orders directly to liquidity providers, while market-maker models may involve internal price handling that can introduce delays or requotes. The platform and software you use—whether a desktop client, a mobile app, or a custom API—affect processing time; some platforms add extra layers of processing that slow the round trip.
Market factors also play a role. During major economic data releases, liquidity can evaporate and prices jump quickly; execution speed may suffer and slippage tends to increase. Order size is relevant too: very large orders may require partial fills or interaction with multiple liquidity providers, which lengthens execution time. Finally, local hardware and connectivity—your internet type, router, and whether you’re trading from a home PC or a Virtual Private Server—make a measurable difference.
Why execution speed matters for different trading styles
Different trading approaches place different premiums on speed. Scalpers and high-frequency strategies attempt to profit from tiny price differences and typically require rapid, consistent fills; a delay of hundreds of milliseconds can turn a profitable scalp into a losing trade. News traders, who act around scheduled economic releases, face sudden volatility where the speed advantage reduces slippage and increases the chance of being filled near the intended price. Automated strategies and EAs (Expert Advisors) are sensitive to latency because their logic assumes orders execute nearly instantly.
By contrast, swing traders and investors who hold positions for days or weeks are less affected by millisecond differences at entry and exit. For these traders, execution speed is still worth checking, but priorities often shift toward overall costs, trading conditions, and reliability.
Concrete examples to illustrate impact
Consider two scenarios. In the first, a scalper aims to buy EUR/USD at 1.1000 targeting 3 pips. At the moment of clicking, the displayed price is 1.1000, but the broker’s average fill time during that hour is 400 milliseconds and volatility spikes. The order is filled at 1.1004, turning a potential 3-pip winner into a near-breakeven trade or a loss once spread and fees are counted.
In the second example, an automated strategy runs on a VPS located close to the broker’s servers. The trader notices that by moving the robot off their home connection and onto the VPS, average fill times drop from 300 ms to 70 ms. That improvement means fewer missed entries during busy periods and tighter execution for small, frequent trades.
How to evaluate a broker’s execution quality
When you choose a broker, read their order execution policy and look for transparency: do they publish execution statistics, slippage distributions and average fill times? If no data is available publicly, ask customer support for execution reports or sample trade comparisons. Testing with a demo account helps, but remember that demo liquidity and live market conditions can differ; a broker may throttle or route demo orders differently than live ones. Many traders run small live test orders during different sessions—quiet and volatile—to observe real slippage and requote behaviour before committing larger capital.
Also evaluate the whole execution environment: reported latency, typical spreads, platform stability during news, and whether the broker provides a VPS option, FIX API, or co-location services. For algorithmic strategies, access to raw market data and the ability to use limit and stop orders with predictable behaviour are just as important as raw speed.
Practical steps to improve your own execution speed
There are straightforward measures traders can take to reduce latency and improve fills. Using a wired internet connection rather than Wi‑Fi reduces packet loss and jitter. Running your trading platform on a VPS co-located near your broker’s servers removes much of the geographic delay and is especially useful for automated systems. Choosing a broker with a suitable execution model for your strategy—ECN/STP for market access or a reputable market maker with good execution statistics—aligns infrastructure to your needs. When appropriate, using limit orders instead of market orders can reduce slippage, though they carry the risk of non-execution. Finally, avoid trading at moments of extreme illiquidity unless your strategy explicitly accommodates it.
Risks and caveats
Execution speed matters, but faster execution does not guarantee profit. Trading is inherently risky and losses are possible regardless of how quickly orders fill. Some brokers emphasize speed in marketing but hide other costs such as wider spreads, commissions, or restrictive order handling. Ultra-fast execution infrastructure can also add complexity and cost for the trader—co-location, FIX APIs, and professional-grade data feeds may be unnecessary for many retail strategies. Be cautious when evaluating broker claims: ask for transparent, verifiable metrics and consider running small live tests. This article is educational and not personalized advice; always assess whether a particular broker or technical setup suits your risk tolerance and trading objectives.
Key Takeaways
- Execution speed is the time between placing and being filled on an order; it matters most for scalpers, news traders and automated strategies.
- Speed is shaped by broker model, platform, network distance, market liquidity and your local setup; averages can range from a few dozen milliseconds to seconds in stressed markets.
- Check an execution policy and real-world reports or run small live tests to verify a broker’s claims before committing significant capital.
- Trading carries risk; faster execution helps reduce some risks like slippage but cannot eliminate market risk or guarantee profits.
References
- https://www.fastbull.com/brokersview/questions-answers/what-does-trading-speed-mean-3627
- https://forex92.com/blog/what-is-the-impact-of-execution-speed-on-trades/
- https://www.advanced-trade.com/news/5241494
- https://diversification.com/term/execution-speed
- https://www.capitalstreetfx.com/en/ultra-fast-execution-which-broker-is-the-speed-leader/
- https://www.babypips.com/learn/forex/order-execution-quality
- https://www.capitalstreetfx.com/en/ultra-fast-execution-brokers-who-leads-the-speed-race/