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2014issue C1210-13

Constructing forex orders from session liquidity

Build a currency ticket after the open session, the bid-ask-spread, and the broker close are mapped. A market-order seeks an immediate fill, a limit-order waits for a chosen price, and a stop-loss stays unfilled unless a trigger is hit. Same-session round trips are treated as free of overnight interest; rollover can add that charge.

  • Weekday currency trading is nearly continuous because New York, London, and Tokyo sessions are staggered, with a weekend pause.
  • London is described as handling about a third of worldwide currency transactions, with the busiest fills during its overlaps with Tokyo and New York.
  • A market-order fills immediately, a limit-order executes only if a chosen price is reached, and a stop-loss remains unfilled unless its trigger price is hit.
  • Interest is described as accruing mainly on rollover past the broker-defined close, so same-session round trips are treated as free of that charge.
Entries in this reading3 entries
Current trackMarket order32 readingsLimit order51 readingsStop-loss order297 readings

Start with the open session

Editorial framing: treat ticket construction as a session problem. Choose a market-order, a limit-order, or a stop-loss only after mapping which center is open, how the bid-ask-spread will be paid, and whether the position will live past the broker close.

Weekday currency trading is nearly continuous because New York, London, and Tokyo sessions are staggered, with a weekend pause. Eastern-time session hours are given as New York 8:00 am to 4:00 pm, London 3:00 am to 11:00 am, and Tokyo 7:00 pm to 3:00 am.

London is described as handling about a third of worldwide currency transactions, with the most active trading during its overlaps with Tokyo and New York. A session-overlap is the hours when two regional centers are open together, typically the busiest window for fills.

Read liquidity before you pay the spread

Major pairs and important crosses are described as highly liquid, with typically tight spreads and no commissions. Liquidity can become challenging outside those pairs.

The bid-ask-spread is the gap between buying and selling quotes, treated here as the usual implementation cost of a fill. A pip is the smallest quoted increment of a pair, and its cash value changes with the quote and the number of units traded.

The base-currency is the first named currency in a pair; buying the pair means buying this currency. The counter-currency is the second named currency; selling the pair means exchanging the base for this currency.

Construct the order after that map

A market-order is an instruction built to fill immediately at the prevailing quoted price.

A limit-order is a parked instruction that becomes executable only if a chosen price is reached. If that price is never reached, no trade occurs.

A stop-loss is a protective exit instruction that bounds a long or short if a trigger price is hit. It remains unfilled unless that trigger price is reached.

Ask whether the position lives past the close

Interest is described as accruing mainly when a position is rolled past the broker-defined close, so same-session round trips are treated as free of that overnight charge.

Rollover is keeping a position past that broker-defined session close, which can add overnight interest to the ticket cost.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
20 of 26 in the Market order track
201534-35 pp.Next on Market orderOrder-type and routing scripts for faster executionDecide market versus limit, passive versus take, cancel policy, and destination first, then bind those choices to a short script.
All readings on this track · 26 readings
  1. 1995Canceled prints versus executable fills
  2. 1999How order routing changes market and limit fills
  3. 2000Direct access, intelligent order routing, and visible book depth
  4. 2001Retail routing and market versus limit fills
  5. 2001Stop triggers and opening-only short market orders
  6. 2002Market-order routing across linked venues
  7. 2002Market-order routing, internalization, and displayed size
  8. 2004Direct access order routing after the display rules
  9. 2004Listed-stock limit envelopes versus market-order routing
  10. 2005Closing option spreads with limit or market orders
  11. 2005Contingent routing as a pre-trade futures contract
  12. 2007Constructing executable futures orders with market, limit, and fill or kill
  13. 2008Bid-ask spreads, routing paths, and order choice
  14. 2008Retail market buys hit the ask
  15. 2008Limit versus market orders for a commodity option-spread
  16. 2011A pre-trade checklist before market or limit orders
  17. 2013Retail market orders and the displayed queue they never join
  18. 2013Option stop orders, wide spreads and forced market exits
  19. 2014Opening range breakout with weekday ratings, abstention and exits
  20. 2014Constructing forex orders from session liquidity
  21. 2015Order-type and routing scripts for faster execution
  22. 2015Market, limit, and routing choices inside the order life cycle
  23. 2015Handheld futures tickets as a second execution venue
  24. 2017Screen execution starts from the live bid and ask
  25. 2017Electronic stop-loss orders and protected price bands
  26. 2020Market-order slippage on split-adjusted stock prices
By fieldOrder types and routing87 readingsBy year2014163 readings
All 32 readings tagged Market order
Also on Market order5 readings
2013Option stop orders, wide spreads and forced market exits2017Electronic stop-loss orders and protected price bands1995Canceled prints versus executable fills1999How order routing changes market and limit fills2001Retail routing and market versus limit fills