WHY IT IS RISKY TO USE REAL STOPLOSS (TO SEND THE SL BROKER).

1 July 2017, 21:13
Konstantin Kulikov
0
1 215

Opening of the transaction of BUY happens at Ask price, and closing on Bid. Thereafter spread is paid when opening the transaction.

Opening of the transaction of SELL happens at Bid price, and closing on Ask. Thereafter spread is paid when closing the transaction.

As the transaction of SELL is closed at the price of Ask, StopLoss reacts to Ask price.

Value of the price on a chart is equal to Bid price. Value of the price Ask = Bid + spread.

Thus increase in spread value can close transactions of SELL on StopLoss.

The example in which for a moment spread value has made 25 standard points is given in the drawing, as a result of it transactions of SELL were closed on SL though the reasons for closing of transactions weren't. So if your trade system assumes small StopLoss (less than 30-40 standard points), then it is expedient to use hidden from the broker StopLoss (virtual SL) considering spread value.