Hello, another question - thanks for everyone that’s helped me so far!
Question is about accounting for the spread… If I’m going long, I usually place my buy stop above the previous candle, and I add on the spread. As an example If I was going long and the top of the previous candle was 1753, and my spread was 2 pips, I would place my Buy Stop at 1755 which works well.
Question is, what do I do when going short? I know it’s a simple question but I can’t seem to get my head around it! Here’s what I think I should do, but I’m not sure if this is right or not…
Sell stop: 1753
SL (10 pips) 1763 (& add 2 pip spread at this point) - making this 1765
TP (15 pips) 1738
This seems right, but then do I need to account for this in my R:R? My SL has gone from 10 pips to 12, so for a 1:1.5 R should I increase my TP to 18 pips as well?
Thanks all, hope my ramblings makes sense to someone! Happy trading all, Tom
Most charts se the bid price as the price used to draw the chart, so yes, if you want to buy at a given chart price, that actually means bid price, so you would add the spread to the entry price that the chart indicates and submit that price for your order.
If you wanted to sell at a given chart price, that is automatically the bid price, so just go ahead and enter that chart price. But remember that when you close this position, you will have to deduct 2 pips from your gain due to the 2 pips spread.
Thanks Tommor (again!), rather than deducting 2 pips I could add these on to my TP? Is it more common to deduct the pips? I guess it’s up to me but I’m curious what others do.
Your TP should ideally be determined by the TA showing on the chart, in which case for a specific trade you wouldn’t have a choice. But as a D1 trader, I find trying to plan and execute a strategy whose profitability is majorly affected by spread just ridiculous so I’ll have to maybe let someone else comment on what they do.
Here’s what I think I should do, but I’m not sure if this is right or not…