mb trading forex
Jul/100
mb trading forex
Forex stops and spreads?
I’m a little confused as to when stop losses and trailing stops are actually triggered, when taking into account the spread as well as commissions and rollovers.
For example, if you were to go LONG on a currency pair, is the stop triggered when the ASK or the BID reaches the designated price? I assume it’s the opposite when you’re going SHORT?
For instance, if the spread is 2 pips when you enter LONG, does that mean you’re already 2 pips closer to your stop loss, or that if you set a 25-pip trailing stop, that it’s already down to 23 pips, right from the entry?
Also, are things such as broker commissions (for ECNs) and rollover interest “counted” towards how many pips the price has actually moved against you?
Does it matter what kind of broker it is? For instance, I’m currently associated with MB Trading, an ECN broker. I’m not sure if this makes any sort of difference.
If you go long a currency pair, the stop is triggered when the sell (bid) price touches your stop price.
If you go short a currency pair, the stop is triggered when the buy (ask) price touches your stop price.
If you set a stop loss 20 pips from your open price and the spread is 2 pips, then the market will have to move 18 pips against you to get stopped out.
**COMMISSIONS
Any commissions will be taken out separately from a trade and are not reflected in the floating profit/loss of a trade.
**ROLLOVER
Some brokers will modify your entry price to account for rollover, which does not make your rollover cost very transparent. Others will display your exact rollover cost or earnings in a separate field titled rollover or swap.
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