Re-pricing or Recotization
How much do you know about Forex re-pricing? If you are new to the forex market, soon or late you will come across the term re-pricing. Re-pricing means re-rating; Of course, re-pricing is not very common, but it can happen and it is necessary to know what it means so that if you encounter it, you can deal with it properly to avoid it. For this reason, in this article, Zand Trader will introduce you another term called re-pricing or recotization in Forex. So stay with us.
Notice of re-call or re-pricing in forex
A recall notice in the forex world means that the broker you are working with, for some reason, is unable or unwilling to execute trades based on the price rate you entered.
Do you know when this happens? Usually when a market is bullish, the broker will re-call with a new price rate, which is called re-pricing in forex.
Usually, when a major news event that affects the market occurs and sends some sort of shock to the system, the broker re-rates.
Let’s say you decide to buy or sell a currency pair at a certain price, and when your broker receives the order the market is moving too fast to execute at the stated price; In this case, your request will be removed from the platform and will tell you that the rate has been reset and will ask you if you want to continue or not. And almost always the new price is not favorable to the previous price and traders reject it.
Reasons for re-pricing in Forex
Markets are usually moving very fast and when an important news is announced in this area, the market suddenly moves faster. This makes it difficult for the broker to accept the order at the price you requested.
Because the broker you are dealing with is also cooperating with their own brokers, and accepting orders does not depend only on the opinion and desire of your broker, and it makes the decision a little difficult.
Because of this, your broker will consider the current price, not the price you ordered, and let you know to proceed with the re-rate if you wish to trade.
How not to get caught in re-pricing?
Now you may ask, what should we do to avoid re-pricing? In this section of the article, we have mentioned some solutions that can help you avoid this problem as much as possible when doing transactions in the forex market.
Be careful in choosing your broker and try to choose a reliable broker so that you can protect your trading account.
In order to avoid re-pricing, you can choose limit orders. By choosing such orders, in fact, you will tell your broker that I am willing to trade only if the price is at the specified level or better.
Note that if your broker re-rates periodically and frequently, this is a warning to you that your broker may not have enough liquidity and you need to change your broker.
Pay attention to this important point!
It is true that choosing limit orders or setting a loss limit can help you when re-pricing, but when the market slips, these two strategies can also lead to losses, and when prices slip in the market You won’t be able to do anything and your transactions may be done in much worse conditions than re-pricing.
In this article, we introduced you re-pricing in forex (Recotization) and mentioned ways to avoid it for you, and we said that the best and most reliable way to avoid re-pricing is to find the right broker. Choose one that has both a conscience and sufficient liquidity.