Indeed, sometimes we can be surprised because we see the bars on our charts reaching the level of our entry or stoploss or takeprofit but it is not triggered.
We can see an example below :
- ExampleSpread.png (104.84 KiB) Viewed 12349 times
Here, we set a Buy order, the last bar reached the entry but the order is not triggered. Why ? Because the current Spread is too high, since it's a Buy order.
First of all, we can see that the chosen Timeframe is M1, which is very sensitive to the spread.
Then, it's important to notice the differences between BUY and SELL orders :
- Entry of Buy orders are triggered when the Ask is reached.
- Entry of Sell orders are triggered when the Bid is reached.
The Bid is the value of the line price displayed on the charts for the majority of trading software : TradingView, Metatrader, ...
The ask value is not displayed by default usually in these softwares. But you can do it by going in the Chart properties.
Here, we activate the option to display the Ask line price value (under TradingView theme here) :
- ExampleSpread2.png (279.6 KiB) Viewed 12349 times
At the bottom-right of the window, we can see that the Spread is higher than usual : 6.6. This is normal since, it's the end of the Friday, close to the week-end, every broker tends to increase the spread during illiquid period of times.
After having checked the option, we can see the Ask Line, which is higher than the Entry Price Line of our order.
So, this is normal if the Entry price order has not been filled. And it will not be until this Ask Line will reach it.
We would not have this experience if the order was a Sell order, because the Sell order is fullfilled when the Bid is reached.
It's important to notice that to take in account this fact with Stoploss and TakeProfit, this is the contrary. Indeed, Stoplosses and Takeprofits are just reverse orders.
So, you may encounter this experience when the price reaches your Stoploss or TakeProfit but it is not triggered because :
- Stoploss and TakeProfit of Buy orders are triggered when the Bid is reached.
- Stoploss and TakeProfit of Sell orders are triggered when the Ask is reached.
Since the goal of NakedMarkets is to simulate the behavior of the real-time Markets, the software follows these concepts, that you can find in other real-time trading softwares.