FxRobotEasy Editorial · 30 terms in this cluster
Execution & Broker Models Glossary — Slippage, Last-Look, A-Book vs B-Book
How orders are routed, filled, and rejected — broker business models, execution-quality concepts, infrastructure.
Execution quality is one of the most underestimated dimensions of profitable algorithmic trading. A strategy with positive expectancy can become unprofitable on the wrong broker, while the same strategy on the right broker becomes a sustainable edge. The difference comes down to spread, slippage, rejection rates, and the structural alignment of broker incentives with client outcomes.
This cluster collects the concepts you need to understand broker quality and execution mechanics. The A-book vs B-book distinction is fundamental: A-book brokers pass orders to liquidity providers and profit from spread/commission regardless of client P&L; B-book brokers take the opposite side of client trades, profiting when clients lose. Most retail brokers operate hybrid models, classifying clients by profitability and routing accordingly.
Execution-quality terms (slippage, requote, partial fill, off-quote, spread spike) describe the various ways an order can be delayed or rejected. For scalping strategies, even small amounts of these effects can eliminate edge entirely. For longer-term strategies, they are usually tolerable. Understanding which effects affect your strategy class is essential for broker selection.
Last-look execution is the most controversial practice in forex execution: liquidity providers can reject orders after seeing them, even at quoted prices. Latency arbitrage, the historical exploit that motivated last-look, is no longer practical at retail scale but understanding the dynamic helps you evaluate broker claims about execution quality.
Infrastructure terms (VPS, FIX API, virtual hosting) cover the trader-side technical setup. For serious EA operation, a VPS co-located with your broker's server is essential. FIX API is the institutional-grade alternative to MetaTrader's API, used at scale but rarely accessible to retail traders. STP/NDD brokers are the retail-accessible flavour of A-book execution.
The practical guidance: choose your broker after choosing your strategy. Scalping strategies require ECN brokers with sub-1ms execution; trend-following can tolerate any reasonable regulated broker. Understanding these distinctions saves money and protects against broker-strategy mismatches that destroy otherwise-sound strategies.
All 30 terms in this cluster
A-Book vs B-Book Broker
intermediateA-book brokers pass client orders through to external liquidity providers (banks, ECN networks) — the broker profits from spreads/commissions and has no conflict of interest with p…
STP / NDD Broker
intermediateSTP (Straight-Through Processing) and NDD (No Dealing Desk) describe broker models that route client orders directly to liquidity providers without internal market-making or human-…
Virtual Hosting (VPS)
beginnerVirtual hosting (VPS — Virtual Private Server) is a remote server providing 24/7 always-on infrastructure to run MetaTrader and expert advisors. A VPS in the same data centre as yo…
Spread Spike
intermediateA spread spike is a temporary, often dramatic widening of the bid-ask spread — for example, EURUSD's typical 0.3-pip spread briefly jumping to 5-10 pips around news events, rollove…
Requote
intermediateA requote occurs when the broker cannot fill an order at the requested price (typically due to fast market movement) and offers a new price for confirmation. Requotes are common at…
Partial Fill
intermediateA partial fill occurs when the broker can only execute part of the requested order volume — for example, requesting 5 lots but only filling 3 at the requested price because liquidi…
Off-Quote
intermediateAn off-quote error in MetaTrader (return code 136) means the broker rejected the order because the requested price is too far from the current market price. Causes include outdated…
Last-Look Execution
advancedLast-look execution is a practice where the liquidity provider (or broker) has a brief window (typically 50-200ms) to reject an order after seeing it, even if the price quoted was …
Latency Arbitrage
advancedLatency arbitrage is a high-frequency trading strategy that exploits price differences between brokers caused by different update speeds. A trader with faster data feeds sees the n…
FIX API
advancedFIX (Financial Information eXchange) is an industry-standard protocol for trade execution and market data, used by institutional traders for direct connection to exchanges, ECNs, a…
Broker
beginnerA forex broker is the intermediary that gives a retail trader access to the FX market, provides the trading platform (typically MT4/MT5), handles deposits and withdrawals, and rout…
Broker Execution Model
intermediateThe execution model is how a broker actually handles client orders — passing them to external liquidity providers (A-book), taking the opposite side as principal (B-book), or routi…
A-book Broker
intermediateAn A-book broker forwards client orders to external liquidity providers (banks, ECNs) and earns from spread markup or commission. Profit is independent of client P&L, so the broker…
B-book Broker
intermediateA B-book broker takes the opposite side of client trades as principal, profiting when clients lose and losing when clients profit. This creates a structural conflict of interest. M…
Market Execution
beginnerMarket execution is the order-handling mode where the broker fills incoming market orders at the next available market price, without requoting. The trader accepts whatever price i…
Fill Rate
intermediateFill rate is the percentage of submitted orders that the broker actually executes, versus rejecting or partially filling them. A high fill rate (above ~97%) indicates a healthy exe…
Co-location
advancedCo-location is hosting a trading server in the same physical data centre as the broker's matching engine, reducing network round-trip latency from tens of milliseconds to under one…
Ping
beginnerPing is the round-trip network latency between the trader's server and the broker's server, measured in milliseconds. For automated trading it is a critical performance metric: eve…
Negative-Balance Protection
beginnerNegative-balance protection guarantees that a trader's account cannot go below zero, even after a gap that exceeds the available margin. EU/UK retail clients have it by regulation …
Execution Parameter
intermediateExecution parameters control how an EA submits and manages orders — order type (market vs limit), maximum slippage tolerance, requote retry policy, partial-close logic, trailing-st…
MyFXBook
beginnerMyFXBook is a public trading-account verification service that auto-imports trade-by-trade history from supported brokers via investor-password read-only access. It is the editoria…
MQL5 Signals
beginnerMQL5 Signals is MetaQuotes' native signal-subscription marketplace built into MetaTrader. Each signal carries verified trade-by-trade history from the provider's broker account, ma…
Tier-1 ECN
beginnerTier-1 ECN refers to forex brokers offering Electronic Communication Network execution at the highest market-quality tier — raw inter-bank pricing with sub-0.5 pip major spreads, l…
ECN Broker
beginnerAn ECN broker is a forex broker that routes client orders directly to liquidity providers via an Electronic Communication Network rather than acting as the counterparty itself. ECN…
Swap Rate
beginnerThe swap rate is the overnight financing charge or credit applied to forex positions held past the broker's daily rollover time. It reflects the interest-rate differential between …
Tick Data
intermediateTick data is the granular trade-by-trade or quote-by-quote price feed showing every price change with millisecond timestamps. It contrasts with bar data (M1, M5, H1) which aggregat…
Prop Firm
beginnerA prop firm (proprietary trading firm) is a business that funds traders' accounts with the firm's capital in exchange for a profit-share split. The trader typically pays for an eva…
Latency
beginnerLatency is the time delay between an event (price tick, order submission) and the response (trade fill, broker confirmation). In forex EA context, latency is measured in millisecon…
Broker Tier
beginnerBroker tier is the editorial classification of forex broker execution quality and regulatory standing. Tier-1 ECN (IC Markets Raw, Pepperstone Razor, Tickmill Pro) sits at the top;…
Spread Cap
beginnerA spread cap is a rule in an EA that rejects new trade signals when the current spread exceeds a configured threshold. Common during news events when spreads widen dramatically; wi…
Explore other clusters
- → Performance Metrics Glossary — Sharpe, Calmar, Profit Factor, and More
- → Order Types Glossary — Market, Limit, Stop, OCO, Trailing, and More
- → Risk Management Glossary — Drawdown, Position Sizing, Kelly Criterion
- → AI & Machine Learning Glossary — Pattern Recognition, Overfitting, Walk-Forward
- → MetaTrader Files & Configuration Glossary — .set, .tpl, Magic Number
- → Forex Scam Prevention Glossary — KYC, Chargeback, Ponzi, Regulator Routes
- → Automated Trading Fundamentals Glossary — From EA Design to Live Operation
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30 terms in this cluster, 134 terms in the full forex glossary.
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