My broker hasnt got the AUS/CAD pair i was looking at so i made it synthetically on my demo account (long aus/usd, short usd/cad). Im slightly confused on how i would place my stops on each of the currency pairs. For instance let’s say i want a 30 pip stop on the aud/usd would that mean i would have a 30 pip stop on both the aus/usd and the usd/cad?
Depends on the trading platform, on metatrader, when you buy your limit will be up (add to market price) while your stop will be down( subtract from market order)and when you sell your limit will be down( subtract from market order) while your stop will be up (add to market price)
I’m not asking how to physically place a stop. Essentially what I’m asking is whether a 30 pip stop in both the constituent pairs equates to a 30 pip stop in the synthetic pair.
Basically, you can’t do what I think you want to do - put stops in the individual components to equate to a stop in the cross. That’s because there isn’t one specific way in which the cross will move to your stop. Both of the components could rise, both could fall, or they could go in opposite directions. In any one of those cases you could get your stop triggered in the cross. If you were to try to put a stop in the components you would run the risk of one of them getting stopped out, leaving you with one leg still on.
I actually thought this would be the case, i guess i’ll just stick to whats available . Thanks Rhody