Why didn't my TP trigger?

Hi all,

Currently running a demo account with a strategy that I have been developing for some months now. Today as per usual I set my trade up, decided my TP and SL and as usual 'set and forget'.

When I went to check on my trade I realised that price had spiked through my TP (BLUE LINE) but it had not activated, could anyone please explain this?

Pic attached.

https://charts.mql5.com/8/279/eurgbp...l-services.png

Hi,

From what i understood, you entered short at the first red sign, and your trade was closed in loss after Bid price (The drawn prices are Bid, not Ask) crossed what was supposed to be your tp on the lowest line (0.70603).

However, i have 2 questions, answering them might be enough to understand the situation :

1. At what prices are Short trades closed ? Bid or Ask ?
2. Based on your previous answer, was your TP touched by the appropriate price serie ?

Please don't take my way of answering the wrong way.
In my early days, i was wondering the same about a few trades that should have been closed on tp (later on found out that in reality, tp was never touched...)
And the explanation was given to me pretty much this way.

Of course, there could be another reason for this, but i doubt it would ever happen on demo, or even on real account for individual traders :
In case you want to exit a 10 lot short trade, you need to find a person (at least 1) willing to buy 10 lot on the same pair. In case of someone willing to buy less than your trade size (let's say they are willing to enter long 5 lot at the place where you want to exit 10 lot short), I'm not sure that your order would be filled completely (i see no logical reason for it to be filled completely anyway given the situation).

Hi mate thanks for your answer.

Bid/Ask, I will have to research this a little better! Here is another pic to clear up where I got in and my SL/TP levels.

My understanding is that when I sell the EUR I am looking to buy it back at my TP. I had a feeling that this was something to do with the spread, any explanation online that you could point me in the direction of?

Hi,

Ask price = Bid price + Spread
This is the precious relation you are looking for

You buy any product at Ask price and you sell it at Bid price. And therefore, when setting pending long entries, or SL on short trades, you have to take into account the spread so that you are not confronted again to the same situation.

As a general rule, when placing long entry or short trade TP, i use BidPrice+2pips (it is rare that my broker goes above this value for spread on eurusd)

You can get a feeling of the difference between the two different prices if you let your platform display the line for Ask price (in your MT4 options, press F8 on general graph to display these parameters).

I hope, you'll find the needed answers, otherwise i stand ready to answer some more questions if needed

Thank you for helping me! Am i correct in thinking that when I enter a long trade I pay the spread when the order is triggered? Therefore the ASK will not affect where my TP should be placed. However when I place a short trade I must take the spread into account as I will not be charged the spread until my TP or SL are triggered.

I'm happy to be of any help.
To be honest, i like answering questions, as it sometimes make new interrogation arise on my side

The spread is paid, no matter what (long or short doesn't matter), at the moment you open your position. That is why trades, at the moment they are executed, are always negative by a few pips (or points depending on your broker) during a variable amount of time (it can also happen that it never becomes positive, but i think you already know this one ).

Here are the only possibility for which you have to be careful about spread :

1. When defining Long entry

Of course, the basics of trading tells us that the action of entering a Long trade is the same as the action of going out of a Short trade.
Therefore you should also apply it for Short exits

It's just that you have to be careful about the fact that your graphs (all of them) represent BidPrice (and i didn't find a way for MT4 to also display historical Ask prices as it would require to know the spread at the exact moment extrema were achieved).

It can also happen that for some brokers using their proprietary platform, the displayed price on graph is an average between BidPrice and AskPrice (i haven't seen a broker such as this using MT4 though)

OK.... So maybe this is what is my main confusion, you pay the spread when you open the position AND when you close it?

No, you don't pay twice the spread...

It is naturaly taken into account when you open your position :

 

1. Short Trade : Open price = Bid price ; profit based on : Ask Price ; profit = -Spread
2. Long Trade : Open price = Ask price ; profit base on : Bid Price ; profit = -Spread

The change in "price of reference" is the moment you pay the spread