Spread & stop orders | Forex Factory

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Spread & stop orders

  • #1
  • First Post: Oct 18, 2015 7:15am Oct 18, 2015 7:15am
I have a question. A newb one, actually.

When I placed buystop/sellstop orders, when the price reaches that stop, would the spread be counted? Or will my stop will be filled at that exact price just as stop price?
For ex.: I place buy stop at 1.13482,
When the price reaches 1.13482, would my orders be filled at 1.13482, or after adding current spread ex. 1 pip, then my buy open price will be 1.13492?

Thanks.
  • #2
  • Oct 18, 2015 7:36am Oct 18, 2015 7:36am
Normally a buy-stop order is triggered at the bid price and a sell-stop order at the ask price, regardless of the size of the sp-read.

But this can actually vary from broker to broker, and is worth understanding clearly (especially in cases involving widening sp-reads).

Some brokers (typically genuine brokers who actually execute trades on their clients' behalf in an underyling market) have in place a specific default, which will usually be the one I've mentioned above, but they allow clients optionally to select another/different method applicable to their own trades, as a preference.

Others (often counterparty market-makers pretending to be brokers) have their own fixed way of doing it and allow no client selection. That will also normally be the mechanism I mentioned above.

It's usually explained somewhere on their site, among all the fine print, or in an FAQ or equivalent.

(And the same applies to stop-loss orders, too, and for the same reasons.)
  • #3
  • Edited 7:11pm Oct 18, 2015 7:59am | Edited 7:11pm
Quoting Xela
Normally a buy-stop order is triggered at the bid price and a sell-stop order at the ask price, regardless of the size of the sp-read. But this can actually vary from broker to broker, and is worth understanding clearly (especially in cases involving widening sp-reads). Some brokers (typically genuine brokers who actually execute trades on their clients' behalf in an underyling market) have in place a specific default, which will usually be the one I've mentioned above, but they allow clients optionally to select another/different method applicable...
Hi Xela. Thanks for your reply. So if I put a buy stop @1.13482 then the orders, normally, will be filled when the price is, say (Ask-Bid)1.13485-1.13482? then the buy opening price will be the 1.13482?
  • #4
  • Oct 18, 2015 7:14pm Oct 18, 2015 7:14pm
Is there anyone here can help?
  • #5
  • Oct 19, 2015 9:04am Oct 19, 2015 9:04am
Your own broker can help, by explaining to you what their method is, and that's the only one that's helpful to you.

This ought to be explained clearly somewhere on their site, but if it isn't, a quick email to their helpdesk or support staff, perhaps repeating exactly the question you've asked above, will find the specific information that's relevant to you.
  • #6
  • Oct 22, 2015 5:59am Oct 22, 2015 5:59am
buy orders open by Ask and close by Bid (here is your spread)
sell orders open by Bid and close by Ask (spread)
Some brokers have 0 spread but they have commission...
  • #7
  • Oct 22, 2015 6:45am Oct 22, 2015 6:45am
Quoting andrern2000
{quote} Hi Xela. Thanks for your reply. So if I put a buy stop @1.13482 then the orders, normally, will be filled when the price is, say (Ask-Bid)1.13485-1.13482? then the buy opening price will be the 1.13482?
Assuming No slippage*, your order will be filled at 1.13482, but it will be filled when price is (Ask-Bid)1.13482-1.13479 -assuming spread remains 0.3 pips.

*slippage isn't uncommon
  • #8
  • Oct 23, 2015 10:06pm Oct 23, 2015 10:06pm
hello.can anyone here explain me what is spread?and how it is calculated?how does movement of pips affect the spread?and does the spread in dollars remain the same for both 10 pips and 100 pips trading or does it increase in dollars with the pips traded?please someone explain this.thank you
  • #9
  • Oct 24, 2015 11:03am Oct 24, 2015 11:03am
Quoting saiki
can anyone here explain me what is spread?

It's the difference between the ask price and the bid price.


Quoting saiki
and how it is calculated?

By subtracting the bid price from the ask price.

These terms "bid price", "ask price" and "spread" are all clearly defined and explained on this short page.


Quoting saiki
how does movement of pips affect the spread?

Pips don't move. Prices move, and pips are the units in which their movements are measured.

Spreads will be wider in illiquid markets, including out-of-hours trading, and when there's very high volatility, including at times of news/fundamentals announcements which can cause fast price-swings.


Quoting saiki
and does the spread in dollars remain the same for both 10 pips and 100 pips trading

Yes; in principle it does (unless it happens to change while a trade is open, and there's more of risk of that with bigger-pip movements than with smaller-pip movements, simply because bigger-pip movements typically take longer - but this is rare, anyway.)
  • #10
  • Oct 24, 2015 5:31pm Oct 24, 2015 5:31pm
I think you also want to view pip value of each currency.
  • #11
  • Dec 26, 2017 11:29am Dec 26, 2017 11:29am
Quoting saiki
hello.can anyone here explain me what is spread?and how it is calculated?how does movement of pips affect the spread?and does the spread in dollars remain the same for both 10 pips and 100 pips trading or does it increase in dollars with the pips traded?please someone explain this.thank you
It’s the difference between Bid and Ask. You can calculate it by many ways, such as calculate your trade order point and the execute point!
  • #12
  • Last Post: Jan 1, 2018 11:04pm Jan 1, 2018 11:04pm
A stop order offers no guarantee that your trade will go through anywhere near the price the stop is set at.
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