I am new to Forex trading, so you will have to forgive me for the possible ignorance in my question here. I have been learning and evaluating forex for the last two weeks on a practice account. But tonight, something happened that scared me good because I don’t know exactly what it was. Here are the events that occured:
On Sunday 9/9/07 9:58 PM, I purchased a standard lot of USD/JPY at 113.040 with a stop loss set at 112.910. The pip spread was low, between 1 and 3, and volitility was low.
At 10:02 PM, the graph showed that the price had dropped to 112.960, and the P&L showed around $-80.00
At 10:03 PM, the graph was going back up and was at 112.970-112.990
At 10:03 I was continuing to watch the P&L very closely, and it was around $-50.00 when suddenly it zerod and closed my position.
I thought perhaps I accidentily hit the mouse and inadvertantly closed my position. So I looked at the log window and saw that my position was automatically sold at 112.910. I thought to myself “Oh, the price must have dipped for a split second and triggered my stop loss.” So I looked at the candlesticks on the 1-min graph at 10:03 PM, but there was no drop.
I requested a customer support agent to chat with to inquire as to what might have happened. They told me that the sell price did hit 112.910. But I didn’t see how, and they could not explain it to me.
Ok, I am new and all, but I’m finding it hard to understand that the actual pair price was 112.970-112.990, but the sell price was 112.910 triggering the stop loss. That’s a 6-8 pip spread! Did I experience some sort of crazy glitch, or do the spreads sometimes spike enormously at various unexpected intervals?
If anyone knows what happened, please help!