I have a question regarding the functionality of the demo account in Trading Station. I know there can be a difference in slippage as compared to a live account, but what I ran into today was a little surprising.
On Friday, 7/22/16, I placed a long entry order for NZD/USD. Buy @ 0.70212, stop @ 0.6950.
When I logged in this afternoon, Sunday 7/24/16, I saw that my order was filled at 0.71218…a difference of 1006 pips. Needless to say, I closed the position.
When placing an entry order is it possible for slippage this large to occur on a live account? What could cause an order to fill +1000 pips above the market price? Is this one of those odd things that can happen in a demo account, but not a concern on a live account?
Thank you for taking the time to read this post. I’m looking forward to learning from your replies.
First in regards to the price your Entry order was filled, I’m looking at my charts now and don’t see any price for NZD/USD higher than 0.7017 on the ask (buy) price, since trading opened for the new week at 5pm New York Time on Sunday. That means your Stop Entry order to Buy at 0.70212 should not have triggered.
If this was a live account, you could file a trade inquiry. If there was an error in our trade execution, we would make the appropriate correction to a live account. However, since this is a demo account, please send me a private message with your demo login details. I’ll have our tech support team investigate why your demo order was triggered.
Regarding slippage, there is theoretically no limit to how much slippage could occur, but I have never personally seen a 1000 pip gap over the weekend. To clarify, your demo stop entry order was filled 100.6 pips higher, not 1006 pips. The fifth digit is one-tenth of one pip. The biggest gaps I have seen are several hundred pips after a major news event. For a recent example, pull up charts of some GBP crosses and look at where their prices reopened after the weekend of the Brexit vote.
Slippage is a risk of trading in any market, with any broker, but with FXCM slippage can be either positive of negative. Positive slippage is more common with limit order, while negative slippage is more common with stop orders due to the momentum of price movement when such order types are triggered. The latest FXCM execution stats showed the following:
[ul]
[li]78.71% of all orders had NO SLIPPAGE.
[/li][li]12.77% of all orders received positive slippage.
[/li][li]8.52% of all orders received negative slippage.
[/li][li]50.02% of all limit and limit entry orders received positive slippage.
[/li][li]39.9% of all stop and stop entry orders received negative slippage.
[/li][/ul]
FXCM’s Trading Station has order features called Market Range and Range Entry. Market Range limits your negative slippage, but not your positive slippage, on Market Orders. Range Entry does the same thing but for Entry Orders (Stop Orders).*
[I]* For risk management purposes it’s best to use this Range Entry feature only for opening new positions with stop orders (AKA Stop Entry orders) and not for closing existing positions with stop orders (AKA Stop Loss orders). The reason is because, from a risk management standpoint, negative slippage on a Stop Loss order is preferable to a trade remaining and potentially losing even more money.[/I]
I appreciate your reply; there’s a lot of good info here. Thank you.
As far as the PM is concerned, I’m still under the number of posts necessary to send PM’s.
Is there another way of sending you my demo acct info?
I’ve forwarded this information onto our tech support team to investigate what happened. I will be out of the office until Tuesday, August 9th. My colleagues should send an answer to you well before then, but I will follow up to make sure when I return.
My compliments to the tech support team; they explained everything in detail and in plain English. I stress this because some tech people give explanations at a level that is difficult for the rest of us to understand. It’s satisfying to know that the FXCM team provides us with good support. Hope you have a great day.
