Hello friends,
This morning I had an sell order for EURUSD ended with stop loss at 3:03 GMT with stop los at 1,3120. Looking back I could see that on 15 min chart high was 1,3117. So stop loss was executed 3 pips before actual stop loss was reached.
Hs this something to do with 3 pips spread, or is this a…
Thank you in advance.
A spread always has to be accounted for.
Meaning?
Sorry.
Meaning you were probably looking at an ask or mid price in your chart, not the bid price where the stop would have been triggered.
When you short i.e. sell in order to close the position you have to buy back so you will have to look at the ask prices not the bid price (which is what most charting programs use to draw the charts). Basically, when the bid price hit 1.3117 the ask price (because of the 3 pip spread) was at 1.3120 which was your SL so the order was triggered.
Meaning I have to study my MT4 more as I don’t know at wich Price I am looking currently. Bah. Thank you.
You just have to remember to take the spread into consideration when setting your SL and TP. You can simply add the spread into your SL, so if you are setting your SL at 30 pips set at 33 pips instead or if you are using a chart point just add 3 more pips.
It took me a while to really understand what the spread meant and the difference between bid and ask prices.
yes you are seeing the difference between the bid and ask (spread). You buy and sell at different prices. So even though your chart may show only bid (i believe thats MT4) the ask was at your order. It happens all the time, as said above account for it in your set ups and you should be fine.
thank you for expaining to me. another lesson earned. br,
I think the market exited at the point you placed the stop loss. The forex market can’t cheat. So i am sure that it is the spread that had caused it.