What Is Freeze Level?
Posted: Sat Jul 08, 2017 1:25 am
In MetaTrader, the freeze level is the minimum distance in pips, measured from the current spot price (Bid/Ask), to be attained to trigger a temporary ban on modifying, deleting or closing the orders, which are near to execution. Thus, a pending order, which is away from the current market price at a distance equal to or within the freeze level, cannot be modified, deleted or prematurely closed.
As it can be understood, freeze level, which is determined by the Forex broker and varies among brokers, primarily exists for two reasons. They are:
To smoothen the order routing process.
To defend against extreme scalping.
The freeze level creates a price band, based on the current price, within which a pending order remains frozen. To understand clearly, as an example, let us assume that a trader had placed a pending order for EUR/USD pair at 1.0740. Let the broker’s freeze level be 5 pips at a particular instance. If the current market price is in the range of 1.0735 and 1.0745 the pending order cannot be modified or deleted.
The impact of freeze level limitation on various kinds of orders can be understood from the following tabular column:
It should be noted that a stop level is similar to the freeze level in the sense that it acts as a barrier to prevent setting of stop-loss or take-profit levels too close to the current market price.
The issue of freeze level matters the most to an automated trader since attempt to modify orders close to the current price will result in error 145. Additionally several unsuccessful attempts will lead to error 141 (too many requests).
Generally, in a calm market, the freeze level is usually less than 2 pips (mostly zero). Only during the time of major news announcements, the freeze level undergoes considerable changes. This is true in the case of all reputed brokers using a worthy order management algorithm.
As it can be understood, freeze level, which is determined by the Forex broker and varies among brokers, primarily exists for two reasons. They are:
To smoothen the order routing process.
To defend against extreme scalping.
The freeze level creates a price band, based on the current price, within which a pending order remains frozen. To understand clearly, as an example, let us assume that a trader had placed a pending order for EUR/USD pair at 1.0740. Let the broker’s freeze level be 5 pips at a particular instance. If the current market price is in the range of 1.0735 and 1.0745 the pending order cannot be modified or deleted.
The impact of freeze level limitation on various kinds of orders can be understood from the following tabular column:
It should be noted that a stop level is similar to the freeze level in the sense that it acts as a barrier to prevent setting of stop-loss or take-profit levels too close to the current market price.
The issue of freeze level matters the most to an automated trader since attempt to modify orders close to the current price will result in error 145. Additionally several unsuccessful attempts will lead to error 141 (too many requests).
Generally, in a calm market, the freeze level is usually less than 2 pips (mostly zero). Only during the time of major news announcements, the freeze level undergoes considerable changes. This is true in the case of all reputed brokers using a worthy order management algorithm.
