Would someone please help me understand this.
I’m demo trading. Just to play around with stop losses, I buy EUR/USD this morning, the spread is two pips.
I bought at…1.47229
Stop loss set at…1.46834
It hasn’t stopped out and is still going at…1.46851
What did I do wrong? Shouldn’t it have stopped?
Thanks
I take it you set a “sell” stop loss.
I take it that your buy amount = stop loss amount.
If these things are correct, then check your program to see if the stop loss did register.
Sometimes a mouse click may not register the stop loss.
If this is also OK, then, even though you are demo trading, consult your broker by telephone and ask them for an explanation.
Wouldn’t the bid price have to fall to 1.46834 before the stop was triggered? If the price is 1.46851 it is still above your stop loss. I’m new to forex so I don’t know if you were thinking that the spread is automatically added to your stop loss? Is this normally the case?
You are 2 pips from your stop loss if you went long. So there isnt anything wrong now if Price< Stop Loss some thing is wrong. You set a stop for 395 pips if you include the spread.
Okay, thanks for the help everybody. I thought to use a stop loss, you just had to put it lower than the current buy price and it would work. I guess I need to experiment with them a bit more.
Not quite sure what your issue is here. Also its standard practice to quote to 4 dec places not 5
So rounding up you buy at 1.4723 which I assume is EU so spread usually 1 pip or less. So at the time of your purchase you would have 22/23 on your quote and start at -1
With your stop at 1.4683 you have taken a 40 pip risk and this will be activated when the quote is 83/84. Depending on liquidity it may be filled at market at that price or lower. However you are currently at 1.4685 which will show at 85/86 on your platform so you are 2 pips away from your stop being triggered
Learn the basics please.
In your example, as others have told you,
you are still 2 pips away from getting
your stop/loss triggered. When you enter
a position, you already start behind the
spread amount of the pair you are trading.
Your stop loss won’t get hit in the
quoted spread amount. Your stop/loss
will hit only when the current price hits
that specific price of the stop/loss amount
you have set.
Also its standard practice to quote to 4 dec places not 5
So rounding up you buy at 1.4723
Must be trading with FXCM, they quote to the 5th decimal place, though i havent decided if thats in our favour or not.
Though i’m sure your SL will be hit when the bid price reaches your limit, another 2.3 pips. The spread is covered when you place the order as Tony said, you start out negative.
I think for most retail brokers, when you place an order(buy or sell) it is at the ASK price not the BID price. Then your SL is triggered for a buy at the BID price and for a Sell at the ASK price.
Cheers
I know of 2 other brokers that goes to the tenth of a pip.
Figured out that I was confused by pipettes on Oanda. Got rid of them and problem solved. Stupid problem - yes. But solved anyway. :o
Yes, I’m using Oanda and although a bit confusionary, I’m getting used to it.
What’s the other one, if you don’t mind? 