MT4 often measures pips with a different decimal position.
Example:
As shown in the above image, I measured the height of the EUR/USD candle for Sept 29 2015 with MT4 on the left and FXCM’s Trading Station on the right. As you can see, the MT4 measurement is 853 pips and the FXCM measurement is 85.3 pips. The “20 pips” your MT4 entry window is speaking of may actually mean 2 pips.
If you right click your chart in MT4 or hit F8 you will get the following window:
Try selecting the “Show Ask line” option. When you do, you should see a new red line with a price on the end of it like this:
MT4 charts are ALWAYS bid charts. The prices you are seeing are the bid prices. The current bid price is the price at which you can sell. The price at which you can buy is higher than that and when you select “Show Ask line” you get a line that shows you where the current ask price is. In the example above, the bid is 1.12501 and the ask is 1.12533. Thus, the difference between the bid and the ask (that difference is called the ‘bid/ask spread’ or the ‘spread’) is 3.2 pips (1.12533-1.12501=0.00032).
So your MT4 order entry window is probably telling you that your order to buy needs to be at least two pips higher than the current bid price in order to be at or above the current ask (which is the price that matters when you are buying). I know it says “20 pips” but it means 2 because it is using a different decimal position. Yes that is annoying and I am not really sure why MT4 is like that, I simply have not bothered to find out why.
IMPORTANT: When you placed an order in MT4 to buy at 1.52022, only the ask price needed to hit that level to trigger your order. Your bid chart may show that the price never struck 1.52022 but that is because your chart is a bid chart, all of the prices on that chart are bid prices and the bid may have never gone as high as 1.52022. So your buy stop was triggered and filled but the bid price never got as high as your entry level. Then, the bid price hit your stop loss at 1.52002 and you were out with a 20 pip loss.
Every time you get an order filled, you start with a drawdown as big as the spread. When your order to buy at 1.52022 was filled, the bid was at 1.52020 or perhaps lower and thus if you closed out the order at that moment you would have lost 2 pips.
To familiarize yourself, pull up a minute chart in MT4 and select “Show Ask line” and watch the bid and ask prices move together for a bit. Depending on your dealer, you may notice the spread get wider and narrower as the prices move.
Hope this clears up some of the fog.
May the forx be with you.
-Adrian