As a forex trader, one of the most important decisions you make is choosing the right broker. ECN brokers are a popular choice among traders because of their transparency and the fact that they offer direct market access (DMA). When you place an order with an ECN broker, it is executed directly on the interbank market, which means there is no dealing desk involved. This results in faster order execution, tighter spreads, and lower trading costs.
In this article, we will explore what happens when a forex ECN broker receives an MQL4 OrderSend() with a stop loss. MQL4 is the programming language used to develop Expert Advisors (EAs) and indicators for the MetaTrader 4 (MT4) platform.
First, let us understand what an MQL4 OrderSend() is. It is a function that is used to send a trading order to the broker. The function takes several parameters, including the symbol name, trade operation (buy or sell), lot size, stop loss level, take profit level, and order type (market or pending).
When you send an OrderSend() function with a stop loss level, the broker receives the order and processes it. The stop loss level is the price at which you want to exit the trade if it goes against you. It is a risk management tool that helps you limit your losses.
Once the broker receives the order, it checks if the requested trade operation, symbol, and other parameters are valid. If everything is in order, the broker sends the order to the liquidity providers (LPs) in the interbank market. LPs are large financial institutions, such as banks and hedge funds, that provide liquidity to the forex market.
When the LPs receive the order, they check if they have a matching order from another trader. If they do, the trade is executed, and both parties receive a confirmation of the trade. If there is no matching order, the LPs hold the order in their order book, waiting for a matching order to come in.
In the meantime, the broker continuously monitors the trade and updates the trader on the status of the trade. If the trade is executed, the broker sends a confirmation of the trade to the trader. If the trade is not executed within a certain period, the broker cancels the order and informs the trader.
If the trade goes against the trader, and the price reaches the stop loss level, the broker automatically closes the trade at the stop loss level. This means that the trader’s loss is limited to the stop loss level, and they do not lose more than what they had planned for.
In conclusion, when a forex ECN broker receives an MQL4 OrderSend() with a stop loss, the order is processed and sent to the interbank market for execution. The broker continuously monitors the trade and updates the trader on the status of the trade. If the trade goes against the trader, the broker automatically closes the trade at the stop loss level, limiting the trader’s losses. ECN brokers offer traders direct market access, which results in faster order execution, tighter spreads, and lower trading costs.
