Limit order weekend gap

shawlayfx · June 28, 2015, 6:56pm

Hi guys,

Please help me with this question.

I had a EURUSD short over the weekend from 1.1300 my TP limit is set at 1.1100.

After weekend, price gaps down to 1.1000, my trade closes at 1.1100 (what I set) and not at market price which is 1.1000. My broker is Ava Trade. Is this correct? I thought limit order is suppose to give you your set price or better, in this case its 100 pips more profit.

Thanks.

pabloroacho · June 28, 2015, 7:52pm

hmm, doesn’t sound good. can u double check the times and did your broker hit your tp with a fat spread maybe? my understanding would have been that you get the next available price after the gap.

Thabo_J · June 28, 2015, 9:14pm

The same thing happened with my broker; markets.com

shawlayfx · June 29, 2015, 12:52am

Time was 3 min after market open.

Maybe its because Market Maker broker rip you off. Next time we should remove TP order over weekend or switch to a ECN broker?

Clint · June 29, 2015, 1:00am

Hi guys.

The problem you are describing is called slippage — specifically positive slippage.

You should have benefited from positive slippage, but it was not credited to your account.

Retail forex brokers are notorious for sticking their clients with negative slippage, but refusing to credit their clients with positive slippage.

Even FXCM — which is generally a fair and reputable broker — was taken to task by the NFA back in 2011 for doing just that. They gave their customers inferior fills when negative slippage occurred, but withheld the extra profits from their customers when positive slippage occurred.

Since that time, FXCM has cleaned up their act, and now their customers actually earn more in extra profits when positive slippage occurs, than they lose when negative slippage occurs.

Here is a portion of a recent post from Jason Rogers, FXCM’s representative here on the forum.

(I’ve added the highlighting, in red, for emphasis.)

Major Silppage on GBP/USD during election result

Also, keep in mind that unlike with some other brokers, slippage at FXCM works both ways. If you have a limit or take profit order, and the price gaps in favor of your trade, then you will get filled at the more favorable price which is trading in the market. This is called positive slippage or price improvement.

A study of over 43 million orders executed through FXCM over a 12-month period from September 2013 through August 2014 found that 53.32% of all stop and stop entry orders received negative slippage. However, the same study showed that over 60% of all limit and limit entry orders received positive slippage.

That’s due to the momentum of price movement when such order types are triggered. Stop orders are triggered when the price is moving against your trade, while limit orders are triggered when the price is moving in favor of your trade.

The year-long study of trades executed through FXCM also revealed the following:

[ul]
[li]73% of all orders had no slippage.
[/li][li]15% of all orders received positive slippage.
[/li][li]12% of all orders received negative slippage.
[/li][/ul]
Over the course of that year, FXCM clients benefited from over $21 million in positive slippage.

Withholding positive slippage is just one of the ways that some brokers fleece their clients.

You should contact your broker via phone or live chat and demand that they re-price your trade. Point out to your broker that you understand slippage, both negative and positive, and you know that there are other brokers — FXCM is one of them — who treat their customers fairly in cases of slippage, both negative and positive.

Good luck in your battle.

TheLastBear · June 29, 2015, 1:03am

Ask your broker to explain what happened to get the best answer to your particular case. Remember that brokers do not guarantee pricing, but either way the best answer will be given by your broker.

shawlayfx · June 29, 2015, 9:28pm

Thanks a lot everyone for your answers! This is a huge help to me. I will try contacting my broker.

Cheers!