**Important question about buying/selling**

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Hello, and thanks in advance for helping me out. Fairly recently I start trading with the MT4 software. There is one huge thing that I do not understand. When I place a trade it always seems to say that I am in the negetive...right away! I have found that on the actual chart above it will display the current value..while at the same time at the bottom in the trade box it will say that I am losing on the trade.

For example:

I entered a trade with GBPJPY for SELL at 221.89. On the chart above (with the line, and little box at the side) it said that it was currently at 221.84. Wouldnt that mean that I just gained 5 pips? NO....and I dont understand why. At the bottom in the box in the PRICE column to the right it says 221.99 So that means that I lost 15 pips??

I dont understand why they do not match up, and which price I need to pay attention to when I am making a trade.

 

Whenever you enter a market order, or any order your order is met and executed at the ASK price

so thats why you see the negative, to get to the positive, the BID price has to be equal to the price of your entry to B/E and higher for long to make money or lower for short to make money

for example

EURO/USD 1.2532 is bid and 1.2534 is ask

if you go long and your order is exectued your entry price at market will be 1.2534 and you will be down 2 pips

cuz you can close your position at bid price.

Hope this made it clear.

 

so..

thanks alot, and sorry that im a total newb and I dont know very much about this.

So going by what you said that would make me think that it would always be better to enter a trade with a bid price as close to possible to the ask in the first place.

Do you often enter trades with a big spread in the bid/ask price? Cause if you go in on one you have to make up the 8 pips difference or so, if it is bad.

Please tell me what you think. Thanks.

 

You just have to account for the spread whenever you trade. If the pair you are trading has a higher spread (like 8 pips) you just have to know that your trade has to move that much more to cover that first before you start making profit.

It is just another one of the many things to consider when entering a trade.

 

if you have afixed spread with your broker, so no matter what you do you always get filled at ask,

and gbp/jpy has a wide spread mine is 8 pips some other brokers are 10

the reason why its wide cuz that pair is volatile and if you are on the right side of the trend you make alot of pips.

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