If you are a trader looking for the best platform for forex trading and avoid fraudulent Forex Brokers, before going too far and vilifying certain forex brokers, please read this article to the end.
This article is devoted to traders who are "newcomers" to forex trading and those of us who don't understand the concept of "Bid & Ask Prices".
There is a myth when we were recently acquainted with trading "SL is hit faster than TP" even though at that time the price was touched.
This can be used as a poor promotion gap from the broker marketing team which I say is also not good, because instead of providing the correct understanding, it is even used as an opportunity to fool the novice trader with his divine sentence "wow, yes, that is the broker and SL hunter, if SL hasn't arrived yet. But it's the TP's location, the price has been touched but the position hasn't been posted, then say the dealer again .... cheat brokers again ... trade at the broker where I am trading ... "or sentence those kinds of talismans.
In fact ... we are the ones who lack knowledge!
And worse, it's more like blaming others than trying to get to know and learn basic knowledge correctly about trading itself.
In addition to our basic knowledge, this (called SL hunter) generally occurs in the SELL position.
You guys need to know something called "Spread", the difference between the bid and ask prices.
In this article, I will explain briefly and practically about this.
If you make a SELL order, then the price given is the Bid price ... and this position will be closed when the asking price touches our TP level (whereas prices displayed on the MetaTrader chart are generally only Bid prices) so you might not see clearly whether the asking price has been touched.
Example:
We make a SELL order in EURUSD at 1.07439 / 1.07449 (10 pip spread - 5 digits).
Then our Sell position will be at the price of 1.07439.
Then we put Stop Loss (SL) at 1.07639 & Take Profit (TP) at 1.07239.
The price moves towards our position ... the price reached 1.07239 but our TP position has not been touched (because remember ... our SELL position will be closed when the asking price touched 1.07239) if the price displayed on our MetaTrader chart is 1.07239 now that means the bid price is 1.07239 and the asking price is still 1.07249 (note spread remains 10 pips), and this is why our position has not been closed even though the price on the chart has touched our TP.
Remember! Our position will be closed when the price displayed in the MetaTrader becomes 1.07229 (bid price), which means the asking price is already at 1.07239.
Yes ... SELL positions will be opened at the bid price and closed at the asking price.
(In contrast, BUY positions will be opened at the asking price and will be closed at the bid price).
Okay, back to the SELL position for the SL case.
Likewise, if the price approaches our SL ... our position will be closed when the asking price reaches 1.07639, which means that at that moment the bid price (displayed on the chart) is at 1.07629.
So it seems that before the price touched SL, it was already closed first ... Then blamed the broker, even though we do not understand this basic rule.
Special Note:
A special case that could have happened is a wider spread ... I once got a spread of more than 100 pips (5 digits) in GBPUSD, which was supposed to be at that time I had to secure my trading position, but my trading position was still floating loss because the spread widens.
Widened spreads can occur when market participants are very inactive (for example, on the first day after the holiday), or also when very active (for example, a few seconds before and after big news is released).
Hopefully, this article can add to the basic understanding of trading for all of us to become a "Smart Trader", it is not easy to be led by fooling by irresponsible marketing.
by: Albinus Tejo S
