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Buy orders

 
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slingle5611

Buy orders

Hi everyone! I'm new here and just started playing with Alveo and trading. I have a question with a couple of my BUY orders. As I'm watching the charts, I place an order to BUY at a certain price, but it is Filled at a higher price. Why?

Fri, 11/20/2015 - 10:14am
 
FXGold54

sling,

with forex there is a "buy" and an "ask" price. When you place a "buy" trade you are filled at the Ask price and when you sell, you are filled at the Buy price. The difference between the 2 prices is called the spread, which is what you pay to trade, in addition to the commission. that is why whenever you open a trade you are already down the spread.

Moreover, when you exit the trade, you have to cover the spread again. for example in a Buy trade the trade does close till the bid price reaches your profit target and in a sell trade the trade not close till the ask price reaches your profit target.

There is also slippage which could slip you a couple, or a lot, of pips depending on the volatility.

Hope that helps,

Allen

 
slingle5611

Thanks Allen, yes that helps. I was looking at the figures backwards.

Steve