Good morning ,
the day before yesterday i observed the mega bars USD/CAN around 16:00 when CAN economic news were released-within seconds the bar shot up 50-100 pip and down,again up and down within seconds.(Last days before i managed several times to “surf up and down” sudden pin bars or big bars,without stop loss or take profit, just manuel jump in and out, but this time it was so fast,that my 30 EUR playmoney just for these news release vanished immediatly…)
Now the questions:
-if i have a take profit order for the up move,lets say 15 pips,and the bar moves within two seconds 30 pips up and 40 pips down,is my order executed at the 15 pips, or is it possible that the move up and down is so fast, that the order is not executed?
-the same with the stop loss-i know,that you never know if you get the stop loss price, it may happen that you get a worse price,but there are also guaranteed stops: but do guaranteed stops really work, when the price movement is so fast?
Depends in your broker. Some will guarantee your stops, others won’t.
In the Jan 2015 black swan event many traders lost everything and some brokers went out of business.
Always read the terms and conditions
The speed of the price movement isn’t relevant to whether guaranteed stop-losses “work”.
They don’t have to “work” (i.e. your counterparty doesn’t need to be able to close his own position in the underlying market, for your stop to be honoured.)
That’s the point of guaranteed stop-losses. That’s what a guaranteed stop-loss is: it’s a stop-loss that will be honoured whether it was possible to trade at the price specified or not. That’s what you’re paying the extra spread for, when you use a guaranteed stop-loss.
When you pay for a guaranteed stop-loss, the counterparty is saying to you “We guarantee that for the purpose of your account with us, settlement will be on the basis of closure at that price whether it was possible for us to trade at that price or not”.
This is one of the (many!) very good reasons why it’s so important to use a properly regulated brokerage in a properly regulated jurisdiction (and not to trade with brokers lightly regulated in Cyprus, the Caribbean, the Seychelles, etc. etc.), so that you have enforcement available if a guaranteed stop-loss isn’t honoured. It really does matter.
I advise you to ignore the members here who may tell you that “where and how your broker is regulated doesn’t make any difference” because they don’t know what they’re talking about, and the question you’ve asked illustrates one specific example of just how wrong they are.
so it does not (in general) depend on the speed of the price movement wether a guaranteed stopploss is executed or not? I mean,if the price just touches my limit a 10th of a second and moves again up,is there a minimum of time the price has to hit my target?
LaughingCharlie is right, the length of time price is at or beyond your order level isn’t relevant, it will still be triggered.
However, there is an upside to this too. If for example you have a take profit order set at level X, and price gets there for only half a second, too fast for you to react and press “Close” manually, then no need to worry, the order will be triggered for you.
Your guaranteed stop-loss will be honoured in those circumstances, and it will be honoured even if the price doesn’t trade at the specified level at all but jumps right through it (which can happen, at “news times”), as long as you use a properly regulated broker in a properly regulated jurisdiction.
That condition really does matter - it makes all the difference in the world.
Sorry to go on about it, but it’s become a really important issue to stress, in this forum, because unfortunately there’s one very active member in particular who replies to many threads here and is continually misinforming the forum’s members about it.
I think he probably just used a less-than-optimal word, by mistake. He probably meant to say “artificial product” rather than “fictitious product”. He wasn’t suggesting they don’t exist at all.
It IS an artificial product, after all. But still highly effective and useful to some people (maybe mostly beginners).
During high volatility news, unusual spread occurs. In the period of time, TP, or stops might not work properly. There is no guaranteed stops or TP works properly
That’s true! But I use, buffer (few pips more as SL & TP) during the high volatility! Like, if my analysis says the SL would be 19 pips then I set it around 26 pips; same strategy for the TP as well.
Your broker has a role to play in this. Some brokers easily guarantee stops while there are many that don’t. Based on your requirements, you will have to find a broker. As you are already using a broker, you can get in touch with customer support to discuss your requirements.
No two brokers offer the same things. You will have to check whether your broker offers what you are looking for. If not, there are many options that you can go for. So, it is always better to check what all your broker offers before you invest with it.
Thanks for all answers, but I started this thread two years ago and in the mean time I found. out that also guaranteed SL or TP is never really guaranteed in turbulent price action
This might be bad - on the other side I gained advantage from that fact, because often my TP order was closed with much more pips than I set TP
)
