You’ve probably heard of order execution flow if you’re starting off in prop trading and MT5 is your preferred platform. It’s not only a trendy term coined by trade enthusiasts. It’s among the most crucial ideas for anyone hoping to become a successful prop company trader. You may really level up by understanding how your transactions go from your mouse click to the market.
Let’s discuss how order execution works in MT5 and why it’s important in prop companies’ high-stress, high-reward setting.
What Is Order Execution Flow?
Think of the order execution flow as the course your transaction takes once you hit the buy or sell button. The sequence of steps that turns your trading decision into an active position in the market is what takes place behind the scenes.
This procedure in MT5 includes the market itself, your broker’s server, your trading platform, and perhaps a liquidity provider. If you think that’s a lot of intermediaries, you’re right.
This flow can help you avoid costly mistakes and possibly even improve your performance metrics in the context of prop trading, where execution speed, accuracy, and strategy all matter greatly.
Why Prop Traders Need to Care About Execution Flow
Maybe you can get away with it without worrying about the specifics if you’re trading on your own account. At a prop business, though? They’re testing you. Time is valuable. Slippage might mean the difference between passing an exam and having to start again.
The following are impacted by execution flow:
- Order speed: The rate at which a transaction fills.
- Slippage: The difference between what you wanted and what you got.
- Requotes or rejections: When pricing changes cause the platform to say “no” to your order.
MT5’s Order Execution Models: Let’s Talk Mechanics
MT5 offers brokers and prop shops a couple of methods to execute orders. These models determine how your trades are executed and the way price quotes are returned. The three primary execution models are:
Instant Execution
This one’s exactly what it sounds like. You ask for a trade at a certain price, and the broker fills it there or gives you that awful request if the price fluctuates.
- Good for: Tighter spreads or slower markets.
- Not so good for: High volatility—prices change too quickly and requotes get in the way.
Market Execution
Your broker fills your order at the best price available, even if it’s not spot on what you clicked. No requests but you may experience some slippage.
- Good for: Markets that are moving fast and you just need to get in.
- Not so good for: When you’re trying to be super precise with entry points.
Exchange Execution
This is used when MT5 connects directly to an exchange (for stocks or futures, for example). Your order goes straight to the exchange and gets filled according to actual order book liquidity.
- Good for: Traders who want real, transparent fills with access to Level II depth.
- Not so great for: Forex traders on most retail/prop firm platforms—niche more.
For the majority of prop traders trading on funded accounts, you’re likely dealing with Market Execution 99% of the time, particularly if you trade forex or CFDs.
Step-by-Step: What When You Click “Buy” in MT5
Suppose you’ve identified a killer setup. Your RSI is aligning, your trendline is clear, and you’re about to pounce. You click Buy. What really happens?
You Enter an Order
Whether it’s a market order, a pending order, or a stop limit, it begins here—you send your instruction from MT5 to the broker’s trade server.
Broker Processes the Order
The server of the broker executes your request. It verifies:
- Do you have any margin?
- Is the price still valid?
- What execution model exists?
Routing to Liquidity Provider (If Needed)
If your broker is operating with an STP or ECN model (which is what many prop firm brokers do), your order may get routed to a liquidity provider—essentially, someone on the other side who’s going to take your trade.
Order Execution
Your order is filled and matched at the best price available, based on market depth, liquidity, and speed. You now have an open position.
Confirmation Sent Back to MT5
After execution, a confirmation returns to your MT5 terminal, and—you can see your position in the trade tab.
Slippage, Delays, and Other Gotchas
Slippage
You wanted 1.10450, but received 1.10460 instead. That 1 pip difference? That’s slippage. That occurs because prices are moving while your order is making its way through cyberspace.
Tip: Use limit orders if you’re finicky about your entry price.
Requotes
Primarily with Instant Execution. You attempt to enter, but the price has already moved and the broker requests, “Wanna try again at this new price?”
Tip: Use Market Execution if this makes you crazy.
Order Rejections
Your trade may not even occur at all if the price moved too quickly, if there is insufficient liquidity, or if you’re striking a server overload (which occurs during news releases).
Tip: Avoid news trading if your company has very strict regulations regarding quality of execution.
