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

What Exactly is a Requote?

A requote occurs when you place a market order but the broker's system cannot execute at your desired price due to rapid price movements or low liquidity. Instead of executing at the requested price, the broker sends you a new quote. You can either accept the new price or cancel the order. This is common in volatile markets or during news events.

How Requotes Work

When you click 'Buy' on USD/LKR or any forex pair, your broker tries to match your order with a counterparty. If the price moves before the order is filled, the system 'requotes' you with the current market price. For example, you want to buy USD/LKR at 320.00, but by the time your order reaches the broker, the price is 320.05. The broker asks if you want to buy at 320.05 instead. This is a requote.

Why Requotes Matter for Sri Lanka Traders

Sri Lanka traders often face requotes due to lower internet speeds, broker server latency, or trading during off-peak hours. Since many local traders use Bank Transfer or Skrill for deposits, any delay in trade execution can eat into profits. Requotes also increase the chance of slippage, which can turn a winning trade into a loss.

Requotes vs Slippage

Requotes are different from slippage. Slippage is when your order is filled at a different price automatically, while a requote asks for your permission. For Sri Lanka traders, requotes can be frustrating because they require manual intervention, which may cause missed opportunities.

For Sri Lanka traders, requotes are particularly relevant because many retail forex traders use local brokers that operate as market makers. These brokers often requote orders to manage their own risk. Additionally, funding your account via Bank Transfer can take 1-3 business days, so any requote that delays trade entry can be costly. Skrill and USDT offer faster deposits, but the execution speed still depends on your broker's infrastructure. The local financial authority in Sri Lanka does not have strict rules on requotes, so it's up to you to choose a broker with transparent execution. Always test a broker's execution speed with a demo account before depositing real money.

1. Choose a Broker with No Requote Policy
   Look for ECN or STP brokers that offer instant execution. Check reviews from other Sri Lanka traders to confirm their experience.
2. Use a VPS for Faster Execution
   A Virtual Private Server (VPS) reduces latency between your trading platform and the broker, minimizing requotes.
3. Trade During High Liquidity Hours
   Trade when London and New York sessions overlap (1:00 PM to 8:00 PM Sri Lanka time) to get better fills.
4. Avoid Trading During Major News Events
   News releases cause extreme volatility and requotes. Wait 15-30 minutes after the news before placing trades.

Requotes are similar to 're-quoting' in that both involve price changes, but requotes are specific to forex market orders. For Sri Lanka traders, requotes are more problematic than limit orders because they remove control. Limit orders allow you to set a specific price, while requotes force you to accept a new one. Compare this to 'instant execution' where the broker fills at the best available price without asking. Always choose instant execution if you want to avoid requotes.

A requote works like this: You place a buy order for 1,000 USD/LKR at 320.00. Your broker receives the order, but the market price has moved to 320.03. Instead of executing at 320.00, the broker sends a message asking if you accept 320.03. You can accept or reject. For Sri Lanka traders, this can happen often if you trade during low liquidity hours or with a slow internet connection. Using USDT deposits can speed up funding, but execution speed depends on your broker's server location. Choose a broker with servers in Singapore or Tokyo for better latency.

Example 1: Ravi in Colombo wants to buy USD/LKR at 320.50. He places a market order. The broker requotes him at 320.55. He accepts and buys. The price then moves to 320.60, so he still profits, but less than if he had gotten the original price.

Example 2: Nimal funds his account via Skrill and trades EUR/USD. He places a sell order at 1.1000. The broker requotes at 1.1002. He rejects the requote and waits. The price drops to 1.0998, so he re-enters and profits more. By rejecting, he avoided a worse price.

The local financial authority in Sri Lanka oversees forex brokers operating within the country. While it does not have specific rules about requotes, it requires brokers to disclose their order execution methods. Regulated brokers must act fairly and transparently. If you experience unfair requoting, you can file a complaint with the authority. Always check if your broker is licensed and read their execution policy. Unregulated brokers may use requotes to manipulate your trades, so stick with regulated ones for safety.

• Test Execution First: Use a demo account to see how often your broker requotes. If it's frequent, switch brokers.
• Use Limit Orders: Instead of market orders, use limit orders to avoid requotes. You control the price you want.
• Monitor Spreads: Wide spreads often lead to requotes. Trade when spreads are tight, typically during major market sessions.
• Check Broker Reviews: Read forums and groups for Sri Lanka traders to find brokers with the best execution.
• Keep a Log: Track requote occurrences to identify patterns. This helps you adjust your trading times or broker choice.

Requotes are a common part of forex trading, but they don't have to hurt your profits. As a Sri Lanka trader, you can minimize requotes by choosing the right broker, using a VPS, and trading during liquid hours. Always test your broker's execution with a demo account first. If you encounter frequent requotes, consider switching to an ECN broker that offers no requote execution. Start your journey by comparing brokers on Comparebroker.io and find the best fit for your trading style.