I've a bit of hypothetical situation that Id like put out there as I do not know the answer.
The broker I am using for my MT4/EA activities is a tad slow at execution sometimes, and you end up with a order open price a few points out of what you expect (slippage). I get that, that's part of doing business. But here's a weird situation for which I don't quite know what would happen, any thoughts?:
I use buy stops and sell stops to set up my positions with Take profit (and stop loss set, but ignore SL for the moment). So let's take a buy stop example, the pending order is to trigger when ask line hits 6500. the take profit is set to 6502. The server accepts the order and duly shows it on the chart. But when the 6500 line is hit, the price is moving fast and you end up getting an order open price of 6502.5 (ie. higher than the take profit!) ... or do you? and this is my question really. What would happen in this situation, would the server reject the order as it would see my TP was lower than the price it can give me and just basically throw it out? or would it execute and immediately close at a loss? or does this entirely depend on which broker youre with and specific platform configuration?
The same situation could apply to sell stops too.I've not witnessed the above example actually happen yet. I'm just trying to anticipate the possibility, if it is a possibility, so that I can think about how to handle that in my EA code (there's probably not a way to deal with it, I'm not sure).
The original target/stop that was missed by a slippage will be triggered if you reach it from any side. That may happen for open trades that gap between trading sessions.
But your case (it happened a couple of times to me as well) smells. The trade was not open prior the gap appeared. If both the stop order and PT limit are in a gap, they should get paired and the trade should get invalidated (my opinion, unfortunately never happens with MT4 brokers).
thanks for the comments. Found this clause, buried in the customer agreement when signing up for an account:
7.13 If a new Order is subject to "Gapping" and/or "Slippage" (see 7.14) on activation and the Order is actioned at a price that would also have activated any associated Limit or Stop Orders, then the position will immediately be closed with a potential loss to the customer of the prevailing InterTrader quoted spread for that market.
Not great but at least I know what would happen, as suggested by whroeder, but I agree with deepthought!
I presume 'limit' includes TP.
On test, the above actually happened at market open on a monday, when volatility is high.
That means the broker always make sure the order request In-Favor to broker whenever request made by client.
I have broker that always have min 3 seconds gap per request; slow I tell you. So, abandoned the broker. No point to continue on using the broker. On the past it is fast execution but no more since they change owner.