What if the broker spread changes while you are holding a position?
Jul 24, 2012 at 08:22
947 Angesehen
18 Replies
Jul 24, 2012 at 08:22
Hello People,
I have a question about the broker spread.
Let's say the current broker spread is 2, and you entered a position at that point.
You are holding the position, but the spread changed to 5 for some reason.
1) Then what happens if I close the position when the spread is 5?
2) If you had a stop-loss order 3 pips below, would you be stopped out?
Can anyone please clarify these with some explanation of general procedure how FX trading occurs? (bid, ask etc)
Thank you!!
ASB
I have a question about the broker spread.
Let's say the current broker spread is 2, and you entered a position at that point.
You are holding the position, but the spread changed to 5 for some reason.
1) Then what happens if I close the position when the spread is 5?
2) If you had a stop-loss order 3 pips below, would you be stopped out?
Can anyone please clarify these with some explanation of general procedure how FX trading occurs? (bid, ask etc)
Thank you!!
ASB
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 24, 2012 at 08:42
Long ( Buy )
order open : Ask
order close : Bid
Short ( Sell )
order open : Bid
order close : Ask
if spread widens then it will take your SL.
order open : Ask
order close : Bid
Short ( Sell )
order open : Bid
order close : Ask
if spread widens then it will take your SL.
Mitglied seit Jul 03, 2012
186 Posts
Jul 24, 2012 at 10:17
I would highly discourage you to set a S/L three pips below where you opened your position otherwise I can imagine that you lose every trade you place.
Pax puts the X in Forex.
Jul 24, 2012 at 23:52
(bearbeitet Jul 24, 2012 at 23:54)
When we are referring the 'current exchange rate', is it bid or ask? (or avg?)
And, when we say spread 'widens',
if the current spread is
[A------B]
do you mean,
[A-----------B] (A fixed)
or
[A------------B] (B fixed)
or
[A-----------------B] (the avg fixed)
or just randomly the end points moving?
Thanks,
My apology for not being so concise.
ASB
And, when we say spread 'widens',
if the current spread is
[A------B]
do you mean,
[A-----------B] (A fixed)
or
[A------------B] (B fixed)
or
[A-----------------B] (the avg fixed)
or just randomly the end points moving?
Thanks,
My apology for not being so concise.
ASB
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 25, 2012 at 00:14
(bearbeitet Jul 25, 2012 at 00:15)
I hope this is not a joke
spread depends on what kind of account you trade with
fix spread
variabe spread
variable spread+comission
which type you are you trading or willing to trade?
spread depends on what kind of account you trade with
fix spread
variabe spread
variable spread+comission
which type you are you trading or willing to trade?
gomoov posted:
When we are referring the 'current exchange rate', is it bid or ask? (or avg?)
And, when we say spread 'widens',
if the current spread is
[A------B]
do you mean,
[A-----------B] (A fixed)
or
[A------------B] (B fixed)
or
[A-----------------B] (the avg fixed)
or just randomly the end points moving?
Thanks,
My apology for not being so concise.
ASB
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 25, 2012 at 00:49
Ask always > ( bigger ) then the Bid.
Ask - Bid is broker profit + comission if there is.
spread widens when price move fast on news hours to protect broker or when price make direction change.
is that clear?
Ask - Bid is broker profit + comission if there is.
spread widens when price move fast on news hours to protect broker or when price make direction change.
is that clear?
gomoov posted:
It is variable spread + commission.
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 25, 2012 at 02:34
there is no way to make profit from spread change on the same data feed.
you pay spread when you open on long
you pay spread when you close on short
ask side is the pay spread side.
when you go long @1.0000 your profit/loss will be calculated from the Bid.
basicly
as soon as you open the trade you will be in loss as much as the spread.
first, bid should reach the ask price to BE ( break even )
'If you close, you gain 10pip.'
you open long with 'ask' and will close it with 'bid'. not with 'ask'. so there is no profit when spread changes.
is that clear?
you pay spread when you open on long
you pay spread when you close on short
ask side is the pay spread side.
when you go long @1.0000 your profit/loss will be calculated from the Bid.
basicly
as soon as you open the trade you will be in loss as much as the spread.
first, bid should reach the ask price to BE ( break even )
'If you close, you gain 10pip.'
you open long with 'ask' and will close it with 'bid'. not with 'ask'. so there is no profit when spread changes.
is that clear?
gomoov posted:
Let's suppose the current bid/ask is
ask: 1.0000
bid: 0.9990
spread = 10pip
and you long @ 1.0000.
If this changes to
ask: 1.0030
bid: 1.0010
spread = 20pip
If you close, you gain 10pip.
So, widen spread doesn't necessarily mean you lose...
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 25, 2012 at 07:56
So ?
gomoov posted:
ask: 1.0000
bid: 1.0010
difference is 10 pip...
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 25, 2012 at 08:21
dear gomoov
when go long
you open with Ask which is higher and close with bid. what is the thing you dont understand.
you but from ask @1.0010
as soon as you buy your profit calculated from bid which is 1.0000
so you are 10 pip loss = spread
walker
when go long
you open with Ask which is higher and close with bid. what is the thing you dont understand.
you but from ask @1.0010
as soon as you buy your profit calculated from bid which is 1.0000
so you are 10 pip loss = spread
walker
gomoov posted:
'
'If you close, you gain 10pip.'
you open long with 'ask' and will close it with 'bid'. not with 'ask'. so there is no profit when spread changes.
'
That's what you said...
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 25, 2012 at 09:31
pen & paper.
make some calculations 😉
make some calculations 😉
gomoov posted:
I was talking about 'when spread widens'...
Mitglied seit Jul 03, 2012
186 Posts
Jul 26, 2012 at 08:34
Wow, you guys are still at this topic? You do know that it shows your P/L in your trading account, right? I mean if this is the issues trading may be not in your future. As it was noted so many times now. You buy with the ask price, you sell with the bid price. I am not really sure about the confusion here.
Pax puts the X in Forex.
Jul 27, 2012 at 06:19
(bearbeitet Jul 27, 2012 at 06:20)
Dear TheLastBear,
I am pretty successful until now with manual trading. However, I did not use MT4(just my broker's platform), so I cannot share my history here. I am at about 12 times the initial deposit.
But, I got tired of keeping eyes on the monitor and felt I was losing many opportunities, so I made up my mind to switch to automatic trading.
I devised a few algorithms, and I am writing a scalping EA... about TP/SL 3~6 pips.
So, my EA is very sensitive on the broker's condition(I changed my broker).
And, the spread thing I asked initially is very important to me.
I didn't really care about spreads cuz I used a broker that had a fixed spread.
So... here is my brief introduction.......
I am pretty successful until now with manual trading. However, I did not use MT4(just my broker's platform), so I cannot share my history here. I am at about 12 times the initial deposit.
But, I got tired of keeping eyes on the monitor and felt I was losing many opportunities, so I made up my mind to switch to automatic trading.
I devised a few algorithms, and I am writing a scalping EA... about TP/SL 3~6 pips.
So, my EA is very sensitive on the broker's condition(I changed my broker).
And, the spread thing I asked initially is very important to me.
I didn't really care about spreads cuz I used a broker that had a fixed spread.
So... here is my brief introduction.......
Mitglied seit Jul 03, 2012
186 Posts
Jul 28, 2012 at 11:33
Ok, as long as your strategy works for you all good.
Pax puts the X in Forex.
forex_trader_79941
Mitglied seit Jun 06, 2012
1439 Posts
Jul 28, 2012 at 12:19
if you are coding and EA use fix spread broker for your EA.
variable spreads fails EA s and damage the EA performance!!
walker
PS : if you are planning to code an EA that based on spread change it is another topic
variable spreads fails EA s and damage the EA performance!!
walker
PS : if you are planning to code an EA that based on spread change it is another topic
gomoov posted:
Dear TheLastBear,
I am pretty successful until now with manual trading. However, I did not use MT4(just my broker's platform), so I cannot share my history here. I am at about 12 times the initial deposit.
But, I got tired of keeping eyes on the monitor and felt I was losing many opportunities, so I made up my mind to switch to automatic trading.
I devised a few algorithms, and I am writing a scalping EA... about TP/SL 3~6 pips.
So, my EA is very sensitive on the broker's condition(I changed my broker).
And, the spread thing I asked initially is very important to me.
I didn't really care about spreads cuz I used a broker that had a fixed spread.
So... here is my brief introduction.......
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