I’m hacing trouble understanding the concept of adding spread to S/L and T/P, can anyone help with this?
btw I’m using EFX.
Supposedly its TTO orders can trigger at either BID/ASK price but they take you out @ BID price is you are LONG, and @ ASK price if you are going SHORT
This means if you are trying to scalp a few pips it makes it almost improssible because of spread.
I’m trying a diagram of this right now but this is how it seems to be working
Going Short…
S/L will be activated when ASK price hits it, taken out @ ASK price
T/P will be activated when BID price hits it, taken out @ ASK price
Going Long…
S/L will be activated when BID price hits it, taken out at BID price
T/P will be activated when ASK price hits it, taken out at BID price
So it seems to me that in order to not get stopped out by spread…
Going Short, you have to add spread to your S/L and T/P
ex. Entry Short EUR/USD @ 1.4445, spread 2 pips, 20 pips profit, 10 pips s/l.
S/L set for 1.4455 but when adding the spread, its 1.4457
T/P set for 1.4425 but when adding the spread, its 1.4423
Is that correct?
Hey Maverick,
The way I keep track of it is this:
[U][B]LONG:[/B][/U] enter (buy) with ASK - TP or SL is triggered by BID because you have to sell to exit position.
[B][U]SHORT:[/U][/B] enter (sell) with BID - TP or SL is triggered by ASK because you have to buy to exit position.
The [B]ONLY[/B] difference between you TP and SL is which side of your entry it is on.
Whatever your spread is (2 for example), price has to move your direction that far for you to break even since you will always open a position that far in the red (-2 pips).
Not sure if that’s what you were asking, but that’s as complicated as I like it to be.
Do you use EFX? because my T/P or S/L can be triggered either by BID or ASK when either going long or short
No, I use GFT and MBT, they both use the same principles.
I can’t see how it’s possible to use ASK to sell out of a long posn and visa versa. I wish you could, it would have gotten me out of some jams;)
Maybe someone who uses EFX can enlighten us.
No you don’t exit @ the ask price, it exits you when ask hits your S/L and the price you exit at is the bid
Try it out on a demo and see for yourself
I guess your question was more platform oriented then. That I cannot comment on.
BID/ASK relationship is universal, I am just aware where each is on every trade.
Those platform options look like they serve to confuse the client.
yes but many pros like efx, altho its complicated they do have low spreads and are an ECN not a MM