Execution Speed in Trading
Execution speed is the time it takes from when you place an order until that order is actually filled in the market. In fast-moving markets, even a small delay can change the price you get and the risk on your trade.
Why Execution Speed Matters
Execution speed is closely linked to slippage, fills and strategy performance, especially for short-term traders and news traders.
💡 You can't control every part of the chain, but you can understand what affects execution and choose brokers, setups and strategies that fit your reality.
What Do We Mean by Execution Speed?
When you click buy or sell, several things happen before your order becomes a real trade:
- Your platform sends the order to your broker's server.
- Your broker's systems validate it (margin, size, symbol, etc.).
- The order is matched internally or routed to liquidity providers / ECNs.
- A counterparty fills the order at an available price.
- The fill confirmation is sent back to your platform.
Execution speed is the total time for this round trip, usually measured in milliseconds (ms) or fractions of a second.
⏱️ For longer-term traders this may not matter much, but for scalpers and active intraday traders, it is critical.
Example: Timeline of an Order
Imagine you place a market order to buy EUR/USD on a broker with decent infrastructure:
Total: Execution time might be around 30–90 ms in good conditions. In volatile or congested periods, it can be longer. The slower this process, the more exposed you are to price changes and slippage between click and fill.
What Affects Execution Speed?
Several components influence how fast your orders are executed:
Internet Connection
Weak Wi-Fi, high latency or unstable connections add delay between you and your broker.
Distance to Server
The further you are (in network terms) from your broker's servers, the longer each round trip takes.
Broker Infrastructure
Server quality, bridge technology, aggregation and routing logic all affect processing time.
Liquidity Providers
How fast LPs and ECNs respond to incoming orders, especially during busy periods.
Market Conditions
High volatility or news can cause congestion, re-pricing and slower responses.
Order Type & Size
Large orders or complex order types may take longer to fill, especially in thin markets.
🔗 Execution speed is the result of the entire chain, not just your device or your broker on its own.
Why Does Execution Speed Matter for Traders?
Execution speed impacts several practical aspects of trading:
📉 Slippage
The slower the execution, the more time the market has to move away from your requested price.
✅ Fill Quality
Slow execution can mean partial fills, re-quotes or even missed trades during fast moves.
📈 Strategy Edge
Strategies that rely on small, quick moves (scalping, news trading) can break down if execution is too slow.
🛡️ Risk Control
Delays on stop orders or emergency exits can increase losses in sudden moves or gaps.
💡 Even for swing traders, extremely poor execution can erode performance over time, especially on tight stops or frequent entries.
How Can You Improve or Work Around Execution Speed?
You can't control everything, but you can take practical steps:
- Use a stable, wired connection when possible instead of weak Wi-Fi or mobile data for serious trading sessions.
- Choose brokers with servers closer to you or use a VPS (Virtual Private Server) near the broker's servers if you run automated or latency-sensitive strategies.
- Avoid peak congestion times or ultra-high-impact news unless your strategy is designed for them.
- Right-size your orders so they can be filled easily in the markets you trade.
- Check your platform load: Too many indicators, charts or EAs on one terminal can slow down order processing on your side.
🎯 For most retail traders, focusing on stable connectivity and a reputable broker is more important than chasing ultra-low millisecond latency.
Common Misconceptions About Execution Speed
"Faster execution always means better trading results."
Faster is helpful, but your strategy, risk management and discipline matter far more than shaving a few milliseconds.
"All slippage is caused by slow execution."
Slippage is driven mainly by volatility and liquidity. Even very fast execution can slip in extreme conditions.
"Retail traders need HFT-level speed to succeed."
High-frequency trading is a completely different game. Most retail traders operate on higher timeframes where human decision-making matters more than microseconds.
Quick Checkpoint: Do You Understand Execution Speed?
See if you can answer these in your own words:
- What is execution speed, and how is it measured?
- Which parts of the order's journey can add delay?
- How does execution speed interact with slippage and fill quality?
- What practical steps can you take to improve or work around execution speed as a retail trader?
Tip: If you can explain these clearly, you have a realistic view of how your orders move from your screen into the market.
Frequently Asked Questions: Execution Speed
What is a "good" execution speed for retail trading?
For most retail traders, execution in the range of tens of milliseconds to a couple of hundred milliseconds is reasonable. What matters more is consistency and fairness than absolute microsecond speeds.
Does using a VPS really help?
A VPS located near your broker's servers can significantly reduce network latency, especially if your own connection is slow or unstable. This is mainly useful for automated, high-frequency or scalping strategies.
Can I see my execution speed in my platform?
Some platforms and brokers provide execution time statistics or timestamps in order reports. You can also infer speed by comparing timestamps on order submission and fills in your account history.
Do STP/ECN brokers execute faster than dealing desk brokers?
Not automatically. Execution speed depends on total infrastructure, routing and LPs. A well-built dealing desk can be faster than a poorly configured STP/ECN setup. Real execution data is more important than labels.
Summary: Execution Speed and Your Trading Edge
Execution speed is the time it takes for your orders to travel from your platform to the market and back. It influences slippage, fill quality, and the viability of short-term strategies, especially in volatile markets.
As a retail trader, your goal is not to compete with high-frequency firms, but to ensure that your execution is fast enough, consistent and fair for your chosen style. Combined with good risk management and realistic expectations, this supports a more robust trading edge.
Next Steps: In the next lesson, you'll look at market depth, which will show you how much liquidity exists at each price level and how that interacts with order size, spreads and execution.
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