I am trading USD/CAD on a demo account. I have setup the trading platform to have SL order at 15 pips and TP order at 2 pips.
The spread is about 6 - 7 pips at the moment. I buy at market (Buy Price = 1.3522). The setup in the tool automatically added 2 pips as the TP order (as setup by me) - I assumed it would add this to the price at which I bought it. But it actually added to the sell price (sell price = 1.3516 when order was placed). So the TP order was 1.3518 !! and buy was 1.3522 !! on this long order. I only noticed this after checking the summary ! Another lesson I guess. A very basic one perhaps ? Is this how your tool functions as well ?
Congratulations on being the winner of the “polite understatement award” for 2016 (sounds very British, doesn’t it? ).
Please tell me that this is on demo only??
So you need the price to move 8-9 pips in your favour to gain 2 pips, and meanwhile your stop-loss is 7.5 times the size of your target? Have you worked out what win-rate you’ll need, overall, just to break even? (It’s a [I]scary[/I] calculation!).
To address your substantive point: trading platforms have a default setting regarding “which price it will add it to” and you [I]should[/I] be able to change this as a user-defined setting (consult either the manual or the help-desk: if you really [I]can’t[/I] change the default, and want to, then change the software!).
If I can ask a question, here: why are you trading like this
I setup the 2 pip target on the “Preferences” settings. So when I place an order and click a checkbox to add TP order, it puts the value of the TP order at mkt price of the closing order + 2 pips. However I need it to add (Or subtract)the 2 pips to the Mkt Price of the opening order. I need to further explore the settings to change the defaults.
I do realize that we need to let the winners run and cut the losers short - and also the point you make about win-rate I was not trying to learn or come up with a strategy however. I was just trying something out about how an indicator works so I was just placing default orders without looking closely at the direction and also the strategy and win-rate etc. I have been away for sometim from the trading and getting reacquainted with the basics ! and totally forgot about the spread - the confusion about the position it was showing was quite funny when I figured out what it was.
Another thing is - I am still working on strategy - but like you mentioned in one of your other notes - I may try to use SL order only as a cover. I would manually close the position well before that - in a way that would reflect a much better ratio of SL and TP. Still checking it out.
Your risk reward ratio is very poor, you need a lot of winners to even break even. Try to trade in a method that has more return than the risk in order to remain on the positive side in trading for long terms.
That all makes sense, of course … (thanks for satisfying my curiosity!)
Makes sense … I quite often do that, myself: I’ll have a stop-loss (entered automatically, with the trade) but if the price turns against me, I’ll often close it manually before the SL is actually hit. It saves a few dollars but makes working out what your [I]actual[/I] risk was slightly more difficult …
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