Why it matters
Stops and market orders execute against the top of book. If your backtest assumes mid fills, you are testing a fantasy execution model.
Trading use: the point is not vocabulary. The point is prediction: what changes when this shows up?
Common trap
Thinking the chart’s last price equals tradable liquidity. In fast markets, the top of book can move before your order arrives, turning a planned entry into instant slippage.
Example
Your platform shows 1.1000, but the top-of-book ask has already moved to 1.1002. A market buy pays 2 pips you didn’t budget.
Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.
Notes
Quick rule
- If you see this repeatedly, you are in a different regime than your model assumes.
- Regime change usually means position size change.
- When in doubt: trade smaller, or don’t trade.