Using a demo account, I am practicing my trading and understanding. The last green stick shows a lot of wick, and a very tight fight for control. I had a trade close in this window as it hit my T/P level. I had the trade setup as follows:
Buy price:1.23866
Stop Loss:1.23684
Take profit:1.24129
The trade closed at 15:28:26 with profit.
The OHLC values for that 1 hour 15:00 → 16:00 hard fought green bar was:
What baffles me, is that High value, is less than my Take profit, so how did the trade close? Is it because the last pip number 4 and 9 in this case is ignored?!
Hi, it because of spread, when you are long, you buy at bid price which is visible on chart, when you close the transaction, you are selling at ask price which is not visible in default settings and data window. Regards Greg
No Tom - @ProfesorPips is right - we cannot see all the prices and since there is no “Real price” and the brokers’ prices vary at any particular instant - we have to expect these little anomalies - I did a thread a while back where I investigated some of these incidents a little deeper - and just to make life even more complex - the short-term bars (up to about 4 hours) do not even match up with the long term bars (Say a day or more) because of the way the long term bars are constructed
I can say I’ve made two assumptions here - 1) that the chart is from @renegadeandy’s broker - and 2) that the chart is drawn using bid price values, as is the usual default.
Using these two assumptions, for a long position, a TP will be executed at the bid price quoted by the broker. If the highest bid price recorded by the broker during the time period in question was 1.24124, I don’t see how the TP was executed at a higher bid price, of 1.24129.
However, I have also seen that quoted bid prices move faster than charts, and its possible for a bid price to be quoted and fall back before the chart is re-drawn. I can only think that this is what has happened here - a momentary tiny spike in bid price, which was not drawn on the chart and therefore did not register as a new High.
This is nothing to do with spreads.
@renegadeandy - If I’m correct, this illustrates another concealed risk inherent in trading on tiny time-frames.
Hey Prof, unless I am muddled that’s good thinking but wrong syntax: for the record, you buy at ask price (the higher side of the spread) and sell at bid price (the lower side).
