Dramatically increase in spread, problems with stop and reverse systems

[zzuegg]

Hi, i was currently testing a breakout stop and reverse system which seems to work nice. Until yesterday evening spread on usdchf was at least 40 pips, one trades was stoped out, the reversing trade opened but the EA was not able to set a new reversing order, because Bid was smaller then my sell point and ask higher then my buy point.

What options do you use to overcome this issue?

[Brian Dee - Random Trader]

If your expected trade durations are relatively short, consider something like flipping to Long when Bid clears a level or go Short when Ask drops below the trigger level
This should take spread out of the equation
If your trade duration is a little longer and expected target is a bit bigger, consider, e.g.:-
1) Using the median of Bid/Ask and looking for a break of the trigger level of n seconds or minutes
2) Close of the last n M1 bars above trigger level

Or any combination of above :)

FWIW

-BB-

[zzuegg]

Hi, thank you for your response.

I used pending orders to be able to calculate my risk detailed, a switch to market orders would be relative easy to implement, but the consequences of requotes ecc. maybe influences moneymanagement. Since the EA is a multicurrency basket trader the delay for closing / and reversing 20 orders could be a profit killer.

Seems that i have to go back to market orders in order to get something reliable for such strategies. :( I think it will rewrite the whole system to be Bid based and use a spread logger to not act on spread spikes.

best regards

//z