Smart Order Routing (SOR) in Forex
A clear definition of Smart Order Routing (SOR), with practical context for reading markets and making better trading decisions.
Definition
Smart Order Routing (SOR) is an automated process that evaluates available trading venues or liquidity sources and routes orders according to predefined execution rules. A router may consider price, available size, fees, speed, and other constraints.
How It Works
Orders are instructions, and their exact behavior depends on the conditions attached to them: price, quantity, timing, and what should happen if execution is only partly available. Before confirming an order, read the order type and validity fields rather than assuming every instruction behaves like a market order.
Why It Matters
This matters because two orders aimed at the same market can produce very different outcomes. Level 2 treats order mechanics as a safety skill: configure the instruction you actually intend, then review it before submission.
Key Takeaway
Smart Order Routing (SOR) is an automated process that evaluates available trading venues or liquidity sources and routes orders according to predefined execution rules.
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Why Smart Order Routing (SOR) matters
Understanding Smart Order Routing (SOR) helps traders interpret market information, plan decisions, and manage risk with more context.
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