I opened up my account this morning and checked how my GBP/CHF trade was after the New Years. I had a sell on it, and at initial glace, it looked like I hit my take profit level. But wait! When the markets opened again, it had actually opened quite high before coming back down.
So I had a stop-loss on this order at about 50 points, but my actual loss on this order was 100 points. Is it standard procedure for me to be exposed to this kind of action that lets me risk more than my specified stop-loss?
If that is common, I hope that my broker is as consistent if it has been a profit rather than a loss. Any ideas?
What you experienced is the risk of a so called opening gap. This means that there simply are no prices in between and so your stop is executed at the first available price, which in your case unfortunately was many pips to your disadvantage.
It’s one of the risks of holding a position over weekends or holidays.
I don’t know about the vice versa situation, but I agree with you - hopefully your profit will “pip away” as well.
This happened to me quite a bit when I traded stocks a few years ago.
It got to the point where I would just about always close my position at the close of the trading day as not to be exposed to a gap-open.
Like Roli has said … it tends to happen frequently over weekends and during vacations.
Letting trades go over weekends can be very dangerous. Yes, it can work both ways, but then, in terms of money management, you rely too much on chances.
Don’t know what other here would say but I’d say that weekend-holiday trading with a less “popular” pair like GBPCHF is riskier in terms of “special things” happening than with a pair with more flow like EURUSD.