Ok, this is strange. I just had my first negative slippage experience it sucks. But Deeper I investigate about it the stranger it gets. I think this is not right what my broker did. It’s not right at all.
I had 3 position opened over the weekend with EURGBP. I placed my SL at 0.87690 and because of the gap the broker closed it at 0.88426 so I had a negative slippage of 73 pips x 3 positions = 220 pips negative slippage. That’s just crazy extreme. Is it normal? Anyone who had a similar experience.
(i) Because the market’s closed at the weekend, and that’s where they were able to close your position in the circumstances (you shouldn’t ever trade at the weekend: forex is 24/5, not 24/7);
(ii) Because they’re crooks, weren’t being honest with you and have profited at your expense (not the likeliest explanation at all, but sadly [I]a little[/I] more common than many people realise, and therefore worth mentioning as a possibility, I’m afraid).
After UK Sunday newspapers reported that May was likely to announce a hard Brexit on Tuesday, sterling lost a lot of ground against other major currencies including Euro
It means that your SL level is between the closing price on Friday and the opening price on Sunday night (or Monday depending on your broker’s server time). In such case if you are using an STP/DMA broker and the level of your SL, TP or pending order is crossed in the gap it will be triggered at the first available price at the opening.
Such gaps most commonly appear as a result of some speculations, rumors or force major events over the weekend. As the forex market is closed the expected impact on the currencies prices can be reflected only after it opens. That are the risks of keeping trades open over the weekend. Unfortunately, you had to learn that the hard way .
Stop loss orders get executed at the first available price in the market when the market goes through the level of the orders and they are not guaranteed.
What happened in the case of the client is that the market gapped through the level they requested (0.8769) at the open on Sunday night and their stop loss orders were executed at the first available price in the market which was 0.88426.
This is not us interfering with the order execution, it is just normal market execution for stop orders and it happens
automatically. There is always a risk of slippage for stop loss orders especially when economic figures are announced or at the open after the weekend break.
There is nothing wrong with the execution of these orders.
After UK Sunday newspapers reported that May was likely to announce a hard Brexit on Tuesday, sterling lost a lot of ground against other major currencies including Euro
Well I should start taking the news seriously. I’m a PA trader and news hasn’t been important for me.
My advice is not to keep a position over the weekend if possible or if you do, at least close it personally. If your broker is and STP, big slippage is possible as it comes from the market and is not fixed (this could be an option with a DD brokers). When the market opens and closes there is very low liquidity, wide spreads and high slippage so I do not recommend these hours for trading.
Over the weekend, there was a huge gap in market open of GBP. I was following GBPUSD and I saw it as well. When that happens, it is very likely and almost assured that your stops won’t hit at the price that you requested if you are using an STP broker. With stocks, the slippage is even worse.
If you want guaranteed stops, you would need to go to a market maker broker, but then you have to deal with requotes and a bunch of other nasty things. If you ask me, I would just accept the slippage (which is an actual market scenario) and stay with an STP broker. At least that way you can be assured that there is no conflict of interest.
If the market opens with a gap and you have sl somewhere set in the middle, the SL will trigger and you will be filled at the next available price, in this case the market open price.
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