Question about slippage affecting TP or SL - page 2
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If the market gaps there can be a large amount of slippage when closing an order via SL or TP ...
I agree.
... no broker is going to guarantee the future prices ...
I agree.
Well, some brokers offer guaranteed stoploss orders. I have seen at least one broker (whom I've not used) offer such a service/product for free, but most who offer such a service/product do so for an extra fee (which, I sure, is payable up front and probably non-refundable).Brokers that I have used in the past added some pips to the initial spread if you used their guaranteed stoploss option,
ie. on a sell the entry price would be so many pips lower than the actual bid when opening the order.
Correct. Do you want to lose more or less ?
I agree. But, just to clarify for the OP, there can be a small amount of slippage when closing an order via SL or TP (unless the broker guarantees the SL or TP prices).
- A buy order (OP_BUY) is closed when: Bid >= TP or Bid <= SL.
- A sell order (OP_SELL) is closed when: Ask <= TP or Ask >= SL.
For example, if the current Bid price is 1.35102 and a buy order has a SL of 1.35100 and the subsequent Bid price becomes 1.35098 on the next tick, the buy order will close at 1.35098. That equates to 2 points of slippage, which is not allot but it is some.That was my answer.Thanks much, i didnt really knew that TP or SL were delayed,but i guess this has nothing to do with the slippage.So if i put 2 pip max slippage for an OrderSend() and if the order closes by hitting the TP level 3 pips away from the TP level it had nothing to do with the slippage defined in the OrderSend() function right?
Wondering if there's a way to allow favourable slippage, almost like having two slippage values one for long one for short and depending on which way was beneficial for you the slippage value could be set higher?
Is there a way to prevent the slippage on TP?
I attached below a screenshot with a trade done by my EA on MT5 (+chart), and same trade done on MT4. Both had same TP, closed at the same time, the MT4 one seems to had a positive slippage, but the MT5 one had a ~80 points negative slippage! And the big negative slippage seems to happen way more often on the MT5 servers than on the MT4 servers of the same broker, at least in my case (IC Markets).
The only way (that I have found based on experience) to reduce slippage on the Stop-loss or Take-profit, is not to use broker-side stops, but instead, have the EA manage the exit conditions (virtual stops).
It cannot eliminate slippage entirely, but it can mitigate negative slippage to a good degree, by having the EA monitor the price movement and the spread and only exit when the conditions are more favourable, instead of immediately exiting a position as soon as the target prices are hit (as is the case of broker side stops).
To accomplish this, however, requires good coding skills and well planned exit rules, considering all possible conditions and actions to take.
In other words, a broker-side TP can close with a 90 slippage, but a close order with a 10 slippage parameter will be rejected in this case, am I right?
Yes, and no! The slippage/deviation parameter only works on accounts with Instant Execution Policy, but not on Market Execution Policy. So, the EA, has to do extra monitoring to reduce the probability of negative slippage.
It is, however, important to note that it cannot always prevent negative slippage every time, but it does improve the conditions in favour of positive slippage.
It would be enough for me even to minimize the slippage. Having a 10 points negative slippage instead of some random 90 points is already much better.
Thanks for your answers!