Is this Broker's Error ? or just Me ? | Forex Factory

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Is this Broker's Error ? or just Me ?

  • #1
  • First Post: Dec 7, 2009 12:52am Dec 7, 2009 12:52am
Since this is a technical error, i don't know where to post or ask, so i think this will be a good place to start since i am new to forex trading also.

I had a pending sell order and it was opened at 2009.12.04(Last Friday) 15:30 (GMT+2 Broker time)
Sell 0.02 EURJPY @133.43 with SL @133.68
However, it was closed at 2009.12.04 15:30 due to a spike out and it was closed @133.97

Question is,

How could it be closed above my SL ?

Even though if it was a spike, it should close at my SL right ?

I told the broker about this, and the broker said it was gap, and if gap happened, it would not close at our SL. I find this is very disturbing.

So i checked my balance sheet, every single loss trade, it was always the closing price = Stop Loss price. Isn't it should be like this ?

Any input or opinion will be very much appreciated.

Thank you.
  • #2
  • Dec 7, 2009 1:31am Dec 7, 2009 1:31am
thats normal bro..sometime price jump/gap...
  • #3
  • Dec 7, 2009 1:38am Dec 7, 2009 1:38am
Quoting microsuck_36
thats normal bro..sometime price jump/gap...
Do you mean, it is normal that a closing price is way off our Stop Loss price ?

How can it be normal if the function of Stop Loss is to cut loss if there is something happens that is going against our way ?

Thanks.
  • #4
  • Dec 7, 2009 1:58am Dec 7, 2009 1:58am
Quoting Fng
Do you mean, it is normal that a closing price is way off our Stop Loss price ?

How can it be normal if the function of Stop Loss is to cut loss if there is something happens that is going against our way ?

Thanks.
there is nothing u can do about it..sometime price do jump/gap...depending on situation...sometime u can get like sell at 133.40 evendo u already pending at 133.43
  • #5
  • Dec 7, 2009 2:08am Dec 7, 2009 2:08am
SL @ 133.68 Closed @133.97

It is almost 30 points away. Can it be that huge ?

Still weird according to me. If SL is there, then it should be a fix barrier. I can accept if it is like 5 points away. However 30 points, is too way off for me.

Thanks Micro.
  • #6
  • Dec 7, 2009 2:12am Dec 7, 2009 2:12am
Quoting Fng
SL @ 133.68 Closed @133.97

It is almost 30 points away. Can it be that huge ?

Still weird according to me. If SL is there, then it should be a fix barrier. I can accept if it is like 5 points away. However 30 points, is too way off for me.

Thanks Micro.
It went through at 1:30pm GMT which was NFP. On my brokers platform there was a gap of over 30 pips when that bar opened, the broker can only give you the closest to your stop loss, its not guaranteed to get the price you want to close it at. Lesson, don't leave pending orders open coming up to a major news item like that.
  • #7
  • Dec 7, 2009 2:33am Dec 7, 2009 2:33am
The agreement with your broker (reputable ones anyway) contains a "best efforts" clause. This means that during times of high volatily, they will try their best to fill your stops and pending orders, but the results are by no means guaranteed.

Consider it this way - you only lost 30 pips and now you know better.
  • #8
  • Dec 7, 2009 2:35am Dec 7, 2009 2:35am
Quoting Fng
SL @ 133.68 Closed @133.97

It is almost 30 points away. Can it be that huge ?

Still weird according to me. If SL is there, then it should be a fix barrier. I can accept if it is like 5 points away. However 30 points, is too way off for me.

Thanks Micro.
no prob bro..just watch out when news come out...
  • #9
  • Dec 7, 2009 2:48am Dec 7, 2009 2:48am
Thank you for all of your responses.
  • #10
  • Dec 7, 2009 3:00am Dec 7, 2009 3:00am
A Stop becomes a Market Order when it is hit. This means that you get the same response from any b roker that you would get when placing an opening Market Order.

Your order goes into the market and will only get honoured IF there is someone willing to take the other side at that time. If there isn't anyone willing to trade at 133.68 you have to wait until the next best price.

You can get some protection by setting the maximum deviation you are prepared to accept when your stop hits the market and this will give a range that you won't accept closing outside of.

But, at the end of the day, this is the way the market works. There are two threads you should read to help you understand what's going on:

http://www.forexfactory.com/showthread.php?t=7484
http://www.forexfactory.com/showthread.php?t=5809
  • #11
  • Dec 7, 2009 3:18pm Dec 7, 2009 3:18pm
Quoting PeterFM
A Stop becomes a Market Order when it is hit. This means that you get the same response from any b roker that you would get when placing an opening Market Order.

Your order goes into the market and will only get honoured IF there is someone willing to take the other side at that time. If there isn't anyone willing to trade at 133.68 you have to wait until the next best price.

You can get some protection by setting the maximum deviation you are prepared to accept when your stop hits the market and this will give a range that you won't accept closing...
We have to wait for someone else to trade our SL price ? I still don't get it. I'm sorry.

So what is the function of SL anyway, if we put it there, but still we have to wait for someone else to trade it?

If it is so, can the broker just cheat like this all the way and close our trade beyond our SL to increase their profit ?

It has become a paradox in a way.

We have to put a SL there to guard our trade, but somehow broker has the reason to close it beyond our SL with reasons. Then SL lose its meaning at the first place.

Thanks Peter.
  • #12
  • Dec 7, 2009 5:41pm Dec 7, 2009 5:41pm
Im sure somewhere in the terms and conditions you wouldve signed away the small print that covers this nugget. Happened to me a couple of times
  • #13
  • Dec 7, 2009 7:01pm Dec 7, 2009 7:01pm
Quoting Fng
We have to wait for someone else to trade our SL price ? I still don't get it. I'm sorry.

So what is the function of SL anyway, if we put it there, but still we have to wait for someone else to trade it?
You need to read up on the definitions of different order types. As Peter states, a stoploss simply places a market order when your specified stop level is hit. If it can be filled at that price, under normal circumstances, it will. If the order can't be filled at that price, it will be filled at the next closest available price. During a news announcement, there may not be any buyers at the price you're trying to sell at or vice versa. During normal market activity, the broker will take the other side of your trade, but they don't have to. They will only take on a certain amount of risk. In a heavily lop-sided market they will stop being your buddy. The spreads widen. That's the broker telling you they don't want you to trade right now and if you do, you'll have to pay the going rate. That's the way the market works and it's nothing new or unusual, nor is it indigenous to this market only. That's just one of the risks of having open orders during news announcements. What's considered a reasonable stop under normal conditions, will be much to close during the news. Your stop will get triggered and your order will fill someplace between where you wanted it to and infinity. Then to add insult to injury, price will usually meander back to where it was. Everything is as it was, except your account is a little lighter.

You'll find that there aren't many guarantees in this business. You need to fully understand the risks before putting your hard earned cash on the line. You are now one lesson closer to to your goal. Welcome to the jungle.
  • #14
  • Dec 8, 2009 12:00am Dec 8, 2009 12:00am
Thanks Acedup and Billflet.

Your last post is very insightful and i kinda understand it now.

Thank you.
  • #15
  • Last Post: Dec 14, 2009 7:34pm Dec 14, 2009 7:34pm
Once you understand about the gap..... you can change to use Oanda as a broker.... no GAPS there.... !!! And gives some more interesting ways to trade and take advantage of what appears to be a gap on other brokers charts.... !!!

Quoting Fng
Since this is a technical error, i don't know where to post or ask, so i think this will be a good place to start since i am new to forex trading also.

I had a pending sell order and it was opened at 2009.12.04(Last Friday) 15:30 (GMT+2 Broker time)
Sell 0.02 EURJPY @133.43 with SL @133.68
[color=black]However, it was closed at 2009.12.04 15:30 due to a spike out and it was closed @133.97

[color=red]Question is,

[color=red]How could it be closed above my...
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