Limit Orders

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Hello guys,

I have a question about limit orders in both MT4 and MT5. Do they guarantee an execution price equal or better than the limit price or the broker just convert the limit orders into market orders when the price touches the limit level the same way it does with stop orders?

Looking forward to your answers

 
Hristo Stilyanov: Do they guarantee an execution price equal or better than the limit price or the broker just convert the limit orders into market orders when the price touches the limit level the same way it does with stop orders?

Supposed to be "or better." Some brokers don't implement them correctly and fill at market.

 
Hristo Stilyanov: I have a question about limit orders in both MT4 and MT5. Do they guarantee an execution price equal or better than the limit price or the broker just convert the limit orders into market orders when the price touches the limit level the same way it does with stop orders?

Not always, especially on MT4 where many brokers convert them to Market orders when triggered and can thus have both positive and negative slippage.

Some MT5 brokers also convert them, while others properly handle them with no negative slippage.

 
Hristo Stilyanov:

I have a question about limit orders in both MT4 and MT5. Do they guarantee an execution price equal or better than the limit price or the broker just convert the limit orders into market orders when the price touches the limit level the same way it does with stop orders?

It depends not just on the broker, but on the asset being traded. If you are trading through MT5 then you could potentially have, on the same account, fx instruments where the broker runs a B book and pockets any advantageous difference between your limit price and the actual fill price, and then also DMA equities where the orders go through to an exchange and are subject to the rules of the exchange.

Looking at the same thing from a slightly different perspective, if your broker passes orders to an LP, it's a question of where the limit order sits: whether it's with the broker, or with the LP. In the former case, the limit order will be converted into a market order. In the latter case, anything might happen, but you ought to see "equal or better" execution.

 
kdufgh #:

It depends not just on ...

By extension, it's very common for demo and real accounts to behave differently with the same broker - for the demo accounts to get equal-or-better execution on their virtual fills, but for limit orders to sit on the broker's server (or with their aggregator) and be converted to market orders when the limit price is touched.
 
There is a method (MT5) that allows you to determine take profit slippage for almost any trading server without your own trading. If there are no negative slippages, then this will be true for limit orders.
 
Fernando Carreiro #:

Not always, especially on MT4 where many brokers convert them to Market orders when triggered and can thus have both positive and negative slippage.

Some MT5 brokers also convert them, while others properly handle them with no negative slippage.


Thank you for your answer. Based on your experience can you mention which broker do it properly?

 
kdufgh #:

It depends not just on the broker, but on the asset being traded. If you are trading through MT5 then you could potentially have, on the same account, fx instruments where the broker runs a B book and pockets any advantageous difference between your limit price and the actual fill price, and then also DMA equities where the orders go through to an exchange and are subject to the rules of the exchange.

Looking at the same thing from a slightly different perspective, if your broker passes orders to an LP, it's a question of where the limit order sits: whether it's with the broker, or with the LP. In the former case, the limit order will be converted into a market order. In the latter case, anything might happen, but you ought to see "equal or better" execution.


Do you have any suggestion how to understand which one of two options my brokers uses? 

 
fxsaber #:
There is a method (MT5) that allows you to determine take profit slippage for almost any trading server without your own trading. If there are no negative slippages, then this will be true for limit orders.
Are you saying the TP orders are the same as limit orders?
 
Hristo Stilyanov #: Thank you for your answer. Based on your experience can you mention which broker do it properly?

Discussing or recommending brokers is against forum rules. You will have to do your own research.

 
Hristo Stilyanov #:
Are you saying the TP orders are the same as limit orders?

Yes.

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