What Is Freeze Level?
In MetaTrader, a 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.
A freeze level value is determined by Forex brokers and varies among them. It exists primarily for two reasons:
- To smoothen the order routing process.
- To defend against extreme scalping.
A 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 table:
|Order type||Open price||Stop loss (SL)||Take profit (TP)|
|Buy||Modification is not allowed||Bid – SL> freeze level||TP – Bid> freeze level|
|Sell||Modification is not allowed||SL – Ask> Freeze level||Ask – TP> freeze level|
|Buy limit||Ask – Open price> freeze level||Based on stop level rules||Based on stop level rules|
|Sell limit||Open price – limit> freeze level||Based on stop level rules||Based on stop level rules|
|Buy stop||Open price – Ask> freeze level||Based on stop level rules||Based on stop level rules|
|Sell stop||Bid – Open price> freeze level||Based on stop level rules||Based on stop level rules|
It should be noted that a stop level is similar to a freeze level in the sense that it acts as a barrier to prevent setting of
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 (ERR_TRADE_MODIFY_DENIED in MetaTrader 4 and TRADE_RETCODE_FROZEN in MetaTrader 5). Additionally several unsuccessful attempts will lead to error 141 (ERR_TOO_MANY_REQUESTS in MT4 and TRADE_RETCODE_TOO_MANY_REQUESTS in MT5).
Generally, in a calm market, the freeze level is usually less than 2 pips. With high-quality brokers, the value is zero most of the time. 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.