What is a Requote in Forex? A Complete Guide for Iceland Traders

What Exactly is a Requote?

A requote happens when you place a market order (e.g., buy EUR/USD at 1.1000) but the broker cannot fill your order at that exact price due to rapid market movement or low liquidity. Instead, the broker sends a new quote, such as 1.1002, asking if you want to trade at the new price. You must accept or reject the requote; your original order is not executed automatically.

How Requotes Work in Practice

When you click 'buy' or 'sell,' your order goes to the broker's dealing desk or liquidity provider. If the price has moved, the broker sends a requote. For Iceland traders, this often happens during major economic announcements (e.g., US Non-Farm Payrolls) or when trading exotic pairs with low liquidity. Requotes are more common with brokers using 'instant execution' rather than 'market execution.'

Why Requotes Matter for Iceland Traders

Requotes can increase your trading costs and cause missed opportunities. For example, if you trade 1 standard lot of USD/ISK (if available) or EUR/USD, a requote of 1 pip could cost you $10. Over many trades, this adds up. Iceland traders using local payment methods like Bank Transfer or Skrill may also face delays in funding accounts, which can exacerbate requote risks during volatile markets.

Requotes vs. Slippage: What’s the Difference?

Slippage is when your order is filled at a different price than requested, but automatically. Requotes require your manual acceptance. For Iceland traders, slippage is more common with ECN/STP brokers, while requotes are typical with market makers. Knowing your broker's execution model helps you anticipate which you might face.

For retail forex traders in Iceland, requotes are a practical concern due to the country's smaller financial market and reliance on international brokers. Many Iceland traders use Bank Transfer to deposit funds, which can take 1-3 business days, potentially causing delays in entering trades at desired prices. Skrill and USDT (Tether) are faster alternatives but may have higher fees or volatility risks. When trading USD pairs, requotes often occur during the overlap of European and US sessions, which is prime trading time for Icelanders (afternoon local time). The local financial authority in Iceland (FME) oversees broker conduct but does not specifically mandate requote policies. Therefore, Iceland traders should choose brokers with transparent execution rules and consider using 'limit orders' to avoid requotes entirely. Additionally, some brokers offer 'guaranteed stop-loss' orders, which can protect against requotes during volatile periods, though these may come with a premium.

1. Check Your Broker's Execution Model
   Before trading, confirm whether your broker uses 'instant execution' (prone to requotes) or 'market execution' (prone to slippage). Iceland traders can find this in the broker's terms or by contacting support.
2. Trade During Liquid Hours
   For USD pairs, trade during the London-New York overlap (13:00-17:00 GMT) when liquidity is highest. This reduces requote likelihood for Iceland traders.
3. Use Limit Orders Instead of Market Orders
   Limit orders specify a price and are less likely to trigger requotes. Iceland traders can set limit orders for USD pairs to control entry points.
4. Monitor News Events
   Avoid trading during major news releases like US interest rate decisions. Iceland traders can use an economic calendar to plan trades and reduce requote risks.

For Iceland traders, comparing requotes to 'instant execution' vs 'market execution' is key. Instant execution gives you more control but often results in requotes. Market execution fills orders automatically at the next available price, which can lead to slippage but no requotes. If you trade frequently, market execution may be better to avoid delays. However, if you need precise entry prices, instant execution with requote acceptance might suit you. Some Iceland brokers offer both models; test each with a demo account to see which fits your style.

When you place a trade in forex, your broker attempts to execute it at the current market price. If the market moves before the broker can fill your order—due to high volatility or low liquidity—the broker sends a requote. For Iceland traders, this process is visible on platforms like MetaTrader as a pop-up window asking you to accept a new price. For example, if you try to buy EUR/USD at 1.1050 but the price jumps to 1.1053, the broker will offer 1.1053. You can accept, reject, or modify the order. Requotes are more common with brokers that have a 'dealing desk' and less common with ECN/STP brokers that route orders directly to liquidity providers.

Example 1: An Iceland trader wants to buy 1 lot of EUR/USD at 1.1000 using a market order. Due to a US jobs report, the price moves to 1.1003. The broker sends a requote for 1.1003. The trader accepts, paying an extra $30 (3 pips x $10 per pip).

Example 2: A trader uses Skrill to deposit $5,000 and trades USD/JPY during the Tokyo session. Low liquidity causes a requote from 110.50 to 110.52. The trader rejects the requote and waits for a better price. This shows how requotes can be avoided by being patient.

Example 3: An Iceland trader using Bank Transfer deposits $10,000 but the funds take 2 days to clear. By then, the desired entry price for GBP/USD has moved, leading to a requote when the trader finally places an order. This highlights the importance of fast funding methods like USDT.

The local financial authority in Iceland, the Financial Supervisory Authority (FME), regulates forex brokers operating within the country. While the FME does not have specific rules on requotes, it requires brokers to treat clients fairly and provide transparent execution policies. Iceland traders should only use brokers that are FME-regulated or authorized under the EU's MiFID II directive, which includes rules on best execution. If you trade with an offshore broker, you may have less protection against requote abuse. Always check the broker's license number on the FME website. For deposits via Bank Transfer, Skrill, or USDT, ensure the broker keeps client funds in segregated accounts, as required by Icelandic law.

• Use a Demo Account: Iceland traders should practice on a demo account to understand how requotes work with different brokers before trading real USD funds.
• Choose ECN/STP Brokers: These brokers typically offer faster execution and fewer requotes compared to market makers, ideal for Iceland traders.
• Set Slippage Tolerance: Some platforms allow you to set slippage tolerance; a higher tolerance can reduce requotes but may increase slippage.
• Monitor Spreads: Requotes often occur when spreads widen. Iceland traders can use tools to track spread changes in real-time.
• Use VPS for Speed: A Virtual Private Server (VPS) can reduce latency and requote chances, especially for automated trading strategies.

Requotes are a reality of retail forex trading, especially for Iceland traders dealing in USD pairs during volatile markets. By understanding what requotes are, how they work, and when they occur, you can take steps to minimize their impact. Choose a broker with clear execution policies, trade during liquid hours, and consider using limit orders. For Iceland-specific advantages, use fast payment methods like Skrill or USDT to avoid funding delays, and always verify broker regulation with the FME. Ready to start? Open a demo account today to practice requote management without risking real capital.