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Can someone please explain this

 
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abmfcs

Can someone please explain this

Hello fellows

I had the attached trade open this morning with 32 ~ 33 pips on it however it was later stopped at a loss of 5.3 pips. Can someone please tell me how I ended up with the loss even though I had my stop loss placed to lock 18.7 pips profit? Is this what we call slippage?

 

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Tue, 10/04/2016 - 1:00pm
 
drewbee

That looks plausible. There was a massive spike to the upside at around 3:40 p.m. which would have taken you past your SL and closed the trade 24 pips away, so major slippage.

 
abmfcs

Thanks Drew. But why did that happen? Was it because of the way orders are processed by Alveo's servers? As far as I understand, theoretically price cannot move away from a point until and unless all orders are that price points are fulfilled. Please correct me if I am wrong.

 
hawianflamingo

During high volatility, the spread can increase suddenly and stop you out.

 
kdroberson08

Unfortunately you got caught on the wrong side of slippage. During that time was the daily bank ledger adjustment for the US.
To answer your second question, theoretically yes price doesn't move until orders are filled. The catch is that the system fills orders in the order they are entered. So even in a normal market, your order may not be filled at the exact TP/SL you have set.

 
puddlebucket

That was a heck of a spike at that time, I took a quick look and it was 30+ pip bar on the M1 chart.

 
abmfcs

Thanks kdroberson08. Now that you mentioned it, I remember seeing some differences in pending order trigger prices and actual fills and S/L.

 
abmfcs

Is there any way to avoid / minimize the slippages?

 
Elijah

abmfcs, there is actually a way to get / maximize slippage in your favour :)

 
kdroberson08

Ellijah, will you share your strategy on maximizing sliippage.

 
lynngary1817

a quote from forex factory person said the gbp/jpy crashed march16,2011 at 129.80 very close to what happened today

 
Valerie

Yen is plunging right now. Lost a bunch of pips.

 
hakchinoy

Actually, that loss wasn't ONLY due to slippage; rather, it was due to "fat fingering".

Please note that the order was a pending sell @ 1.1196 (which opened @ 1.11957) with SL=1.1177. For sell orders, SL should be greater than the purchase price--but it wasn't. So no matter what, that order was doomed to stop out immediately because of the SL setting. In addition to the incorrect SL setting, a combination of wider spreads and/or slippage further increased the magnitude of that loss.

 
denis

I presume that slippage cannot arise if your trade is already triggered? Isn't the spread fixed when the order is filled? I got caught myself a couple of times on NFP when I thought I had 30 PIPS up and ended with a loss of 2. But the spread had spiked before my order was filled and then it stopped me out with a loss.

I listened to Jeff Cristle today during NFP and his set ups do not have stop losses during the event. He sets up corresponding Buy and sell stops to hedge against up or down and limit his exposure.

 
hakchinoy

Slippage can affect ALL trades (both pending and active). Although the spread is a discrete value once an order triggers, the spread also might vary dynamically over an arbitrary stretch of time.

 
nyasha

Hackchinoy, I noticed that abmfcs' stoploss was on the wrong side, but I didn't think alveo would process the order with a stop loss on a sell order lower than the entry, how does that happen?

 
kdroberson08

Nyasha. He had a trailing stop that adjusted because he was in profit.

 
hakchinoy

No. For a sell order, an ATSL would adjust lower--not higher. Also, look at the open and close times: the order open time is 10 seconds later than the order close time (which shouldn't happen), and that clearly--at least from a software implementation side--would result in an order that effectively opens and closes immediately as a loss.

Nyasha, I unfortunately learned the hard way (a few years ago) that Alveo doesn't disallow traders to place orders with improper SLs. I thought they had corrected this, but it appears that a regression might have occurred.

 
nyasha

oh, thanks guys.

 
abmfcs

Thanks for your responses guys. The SL wasn't on the wrong side at trade inception as Alveo doesn't accept such orders. I was manually trailing the stop and was at a profitable margin when the slippage happened.

 
abmfcs

Elijah. Would love to get tips for positively maximizing on slippages :)

 
LiveTradeLaugh

Thanks for pointing this out Hakchinoy!

"Nyasha, I unfortunately learned the hard way (a few years ago) that Alveo doesn't disallow traders to place orders with improper SLs. I thought they had corrected this, but it appears that a regression might have occurred."

I didn't know this was an idiosyncrasy of Alveo. Good to know!

 
hakchinoy

Whether one trails a SL manually or via automation, I haven't seen E/U close trades with that much (nearly 33 pips of) slippage even during NFP. Besides, the date when that trade happened wasn't a NFP Friday; I was trading then too; and I don't recall any significant news events that might have occurred then to introduce THAT much volatility into the market (especially during the Asian session). Plus, the 2016-10-04 H1 03:00 candle is a small doji with a true range of only 17 pips ([high, low] = [1.12015, 1.1198]); hence, a price spike clearly didn't happen then.

Your close is within that true range, but your SL isn't.

Thus, I suspect that an anomaly occurred (with the quote and/or chart servers); it essentially closed your order in that state; and your trade ultimately looks as if it closed with lots of slippage. You probably should have Support review that trade.