How do you deal with widening spreads at the rollover? | Forex Factory

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How do you deal with widening spreads at the rollover?

  • #1
  • First Post: Aug 26, 2016 11:08am Aug 26, 2016 11:08am
Hey guys, this is my first thread I started since joining a year ago.

How do you deal with the widening spreads around 5PM EST? I use an Oanda demo and the prices usually spike around 5PM, sometimes to 20 pips even on majors. I do not trade during news and I do not trade in pairs that have big news releases coming up.

How do you guys deal with it? Not trade during those hours? I trade the H4 and I dont know what to do during that time while I have a trade that I entered earlier.

Suggestions??

EDIT: For the ones that aren't trading in the eastern time zone, it is right when the US Session ends and the Sydney session starts.
  • #2
  • Aug 26, 2016 11:30am Aug 26, 2016 11:30am
Honestly, I would just find a new broker. But if your trading long term to catch like 100-200 pips, then just let it happen. But you can always contact the broker and maybe they will have special deals if you have a larger account.

Cheers
  • #3
  • Aug 26, 2016 11:45am Aug 26, 2016 11:45am
Quoting E300
Honestly, I would just find a new broker. But if your trading long term to catch like 100-200 pips, then just let it happen. But you can always contact the broker and maybe they will have special deals if you have a larger account. Cheers
I appreciate you taking time out to reply!

I am not trading long term, more intraday on the H4 timeframe, so my stop losses aren't too huge, which makes for easy prey when these spreads widen.

Are there reputable brokers that don't widen the spread by so much? I would be able to tolerate a 10 pip spread spike on the majors. I am also in the US, so I am very limited on brokers to choose from.

Thanks!
  • #4
  • Aug 28, 2016 12:00pm Aug 28, 2016 12:00pm
Quoting Hungy1
{quote} I appreciate you taking time out to reply! I am not trading long term, more intraday on the H4 timeframe, so my stop losses aren't too huge, which makes for easy prey when these spreads widen. Are there reputable brokers that don't widen the spread by so much? I would be able to tolerate a 10 pip spread spike on the majors. I am also in the US, so I am very limited on brokers to choose from. Thanks!
Your welcome and try it out on a demo account for a while and see how bad spreads are. Since your on a higher time frame you might be ok! I'm in US as well, and trust me, we a few of good brokers out there!

Thanks!
  • #5
  • Edited 4:03am Sep 5, 2016 12:18am | Edited 4:03am
Quoting Hungy1
Hey guys, this is my first thread I started since joining a year ago. How do you deal with the widening spreads around 5PM EST? I use an Oanda demo and the prices usually spike around 5PM, sometimes to 20 pips even on majors. I do not trade during news and I do not trade in pairs that have big news releases coming up. How do you guys deal with it? Not trade during those hours? I trade the H4 and I dont know what to do during that time while I have a trade that I entered earlier. Suggestions?? EDIT: For the ones that aren't trading in the eastern...

Simply avoid trading around low liquidity period (the week opening period & daily opening period). Also try to check with other true ECN/STP/DMA Brokers with more tight spread during such period as above mentioned. You can, if you don't mind, try Tradeview, Tickmill, IC Markets, Exness, etc. Whichever of the said suites you could be adopted.
Study and risk taking are the engine & fuel that will propel you to success
  • #6
  • Sep 5, 2016 12:54am Sep 5, 2016 12:54am
Trade rollover is typically a very quiet period in the market, so avoid trading during this time.
  • #7
  • Sep 5, 2016 1:57am Sep 5, 2016 1:57am
1 choice is to increase your spread in the EA during news hours
2. Do not trade when spreads are high as risk is high too
3. If its happening frequently then its understood that your broker is a desperate market maker. time to change the broker.
  • #8
  • Sep 6, 2016 11:14am Sep 6, 2016 11:14am
Thanks for all the replies guys! I appreciate it.

As for the advice for not trading around that period, what about when I am in a trade from earlier before, as in a trade 8 hours before the roll over period. Would you simply close out the trade or take out the stop loss for a moment while the spread is high?
  • #9
  • Sep 11, 2016 1:41am Sep 11, 2016 1:41am
Quoting Alicia.T
1 choice is to increase your spread in the EA during news hours 2. Do not trade when spreads are high as risk is high too 3. If its happening frequently then its understood that your broker is a desperate market maker. time to change the broker.
If you already have trades then you can either take a quick small profit and wait for the spread to cool down
and most common logic is to take stop loss if you do not have any option .Do this only if you feel that the market will go against your trade much beyond the stop loss limits. you can use indicators like stochastic or CCI to get some clues of how far the market will go against you.
REMEMBER- if you control your losses, profits will come by themselves.
  • #10
  • Sep 17, 2016 12:12am Sep 17, 2016 12:12am
Rollover charges are the ‘overnight charges’. Rollover occurs because of interest rate difference between two currencies of a currency pair. When interest rate on currency bought is more than sold currency than you earn the rollover and conversely when interest rate on currency bought is less than currency sold then you pay the rollover amount. Spreads widen during these times so, its better to close your open positions on small profits or set a stop loss.
  • #11
  • Sep 17, 2016 12:20pm Sep 17, 2016 12:20pm
I see alot of people saying the obvious "don't trade during these hours", but I think you guys are missing the ops point, he is not asking whether to trade during this period, he is talking about when he is already within a trade taking during normal liquidity times.

For what it's worth here is my input, since I trade the daily timeframes mainly, I use 4hr, but mainly for entries, the widening spread does not affect me, scalpers, short term intraday traders etc with 20pip SL maybe it's different, and in that case I would probably shut down all trades by London close and NY close.
  • #12
  • Sep 19, 2016 8:23am Sep 19, 2016 8:23am
Try to rollover your position when spreads are much tighter for the day. Also use stop loss option to safeguard your interest. Along with that you can use few technical indicators like Fibonacci, CCI and stochastic indicators to get the correct trend at the time of rollover which will help you to fix stop loss.
  • #13
  • Dec 2, 2016 11:53pm Dec 2, 2016 11:53pm
Rollover or swap charges are the interest charges paid or earned overnight. It can add a significant extra cost or profit to your trade. For e.g. suppose you buy a pair of EUR/USD, i.e. buying EURO and selling USD. And the interest rate for EURO is 4% whereas for USD it is 2.25%. So, you’re buying the currency with higher interest rate and hence will earn rollover 1.75% on annual basis. However if you would sell EUR/USD on the same interest rate you will incur additional cost and will have to pay rollover of 1.75% on the pair.
  • #14
  • Feb 1, 2017 9:33am Feb 1, 2017 9:33am
By default, market opening / closing and the time around Rollover are periods when you can observe sharp market movements, wider spreads and low liquidity. So, since you are short term investor and you would like to avoid those events, the best would be to stick to intraday trading, thus avoiding swap costs and any unwanted spread widenings.
  • #15
  • Feb 7, 2017 3:53am Feb 7, 2017 3:53am
Quoting UlliC
By default, market opening / closing and the time around Rollover are periods when you can observe sharp market movements, wider spreads and low liquidity. So, since you are short term investor and you would like to avoid those events, the best would be to stick to intraday trading, thus avoiding swap costs and any unwanted spread widenings.
I agree, rollover rate is the interest rate differential between two nations and generally in the rollover period the spreads may widen due to market volatility lacks of direction in prices or lack of liquidity in markets. So I suggest that one should avoid trading in rollover period.
  • #16
  • Apr 13, 2017 2:31am Apr 13, 2017 2:31am
Rollovers are the overnight charges and spreads widen during these times. So, I would advice simply to not to trade during these hours and close your open positions by taking small profits.
  • #17
  • Last Post: Apr 13, 2017 3:05am Apr 13, 2017 3:05am
Rollover occurs when positions are held overnight through Trading Close. so do not trade or hold trade for long.
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