Forex Stop Limit Question

B

BushBaby

Hi Guys,

I am sorta new, but have experiance trading other disciplines.

I have been shorting euro, pretty much on a regular basis, since the no vote in France.

I use IB, with bracket trader to sometimes enter my orders.

Its now midnite GMT, and I just entered a trade, shorting the euro for 2 contracts, at 1.2063. (Globex Sep 05 - 6EU5)

I let Bracket Trader put in a stop limit of 1.2079 (16 ticks away).

Its a quiet mkt, and the mkt hasnt moved more than 5 ticks either way, for the last hr.

I am watching my bracket trader, and all of a sudden, its like someone jumped out of the ground, and grabbed my stop. IB was trading 1.2064 or so, and all of a sudden it spikes at 1.2079, takes out my stop, and is back to 1.2064 or so.

For the next hr, it hasnt been near 1.2079, and I feel robbed.

Am I wrong ? Should I complain to IB, or just accept it ?

Thanks for any help.
 
Well, I feel your pain, but I don't think IB had anything to do with that spike.

I was watching my screens live at the time (6:54 pm EST). Note the volume blipped as well:

6:49 ... 2 contracts
6:50 ... 4
6:51 ... 26
6:52 ... 58
6:53 ... 157
6:54 ... 350
6:55 ... 55
6:56 ... 1
6:57 ... 2

With a typically thin, pre-Tokyo book, 507+ on the ask is more than enough to effect a 17-tick spike (1.2063 to 1.2080) in a New York second. Especially when dealers are keenly aware that many a Joe Trader is short / gunning for 1.20 spot (~1.2038 futures).

True, spot didn't keep up (1.2025 to 1.2031 only), but that's the way it goes for EuroFX, during illiquid times on GLOBEX.
 
Thanks for that.

I have been using IB for the last 2 mths, and am happy.

This was the first time it happened, and being a newbie, wasnt sure if it was part of the game.

Not sure what I will do in future to counteract it .. but, if spikes do occur, why not put in unrealistic buy limit orders, all over the place ?

Maybe I am getting hold of the wrong end of the stick .. I am loving the game, and just want to learn more.

Thanks.
 
Quote from BushBaby:

Not sure what I will do in future to counteract it .. but, if spikes do occur, why not put in unrealistic buy limit orders, all over the place ?
More...

8 times out of ten you will make a few ticks doing that; the 2 times the train keeps going because of some unforseen event can easily wipe out the gains and more. If you're comfortable with the profile of frequent small gains and occasional outsized losses, go for it.
 
Quote from BushBaby:

I let Bracket Trader put in a stop limit of 1.2079 (16 ticks away).
More...

A stop of only 16 pips will close MOST of your positions for that 16 pip loss.

I find 50 - 100 pips to be better.
 
Quote from uninvited_guest:

If he was short then you can add the spread to that 1.2073.
More...
"spread" on EUR/USD?? what, a pip?

still nowhere close to 1.2080. there wasn't high volatility either so you can rule out slippage.

he got ripped.
 
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