Take profit and stop loss confusion

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Hello,

I need clarification on where to place TP and SL lines in case I sell or buy.

I have an example I saw on YouTube that says If current market price of a pair is 1.0000 and I want to buy it at 1.0005, the spread is 5 pips and my intended TP and SL are both 10 pips then,

I place Buy Stop order at 1.0010 and TP = 1.0020 and SL = 1.0000.

Which confuses me because at the time of buying, the Bid was 1.0005 and SL is at 1.0000 hence I would exit the trade 5 pips away and not 10 pips as I wanted!

I'm sure there is something I missed but don't know what it is.

Thanks in advance,
Husain
 

You buy at the Ask and sell at the Bid. Pending Buy Stop orders become market orders when hit and open at the Ask.

  1. Your buy order's TP/SL (or Sell Stop's/Sell Limit's entry) are triggered when the Bid / OrderClosePrice reaches it. Using Ask±n, makes your SL shorter and your TP longer, by the spread. Don't you want the specified amount used in either direction?

  2. Your sell order's TP/SL (or Buy Stop's/Buy Limit's entry) will be triggered when the Ask / OrderClosePrice reaches it. To trigger close to a specific Bid price, add the average spread.
              MODE_SPREAD (Paul) - MQL4 programming forum - Page 3 #25

  3. The charts show Bid prices only. Turn on the Ask line to see how big the spread is (Tools → Options (control+O) → charts → Show ask line.)
    Most brokers with variable spreads widen considerably at end of day (5 PM ET) ± 30 minutes. My GBPJPY shows average spread = 26 points, but average maximum spread = 134 (your broker will be similar).

 
Husain Ballam:
Hello,

I need clarification on where to place TP and SL lines in case I sell or buy.

I have an example I saw on YouTube that says If current market price of a pair is 1.0000 and I want to buy it at 1.0005, the spread is 5 pips and my intended TP and SL are both 10 pips then,

I place Buy Stop order at 1.0010 and TP = 1.0020 and SL = 1.0000.

Which confuses me because at the time of buying, the Bid was 1.0005 and SL is at 1.0000 hence I would exit the trade 5 pips away and not 10 pips as I wanted!

I'm sure there is something I missed but don't know what it is.

Thanks in advance,
Husain
Place your TP some pips before your intended target and your stop loss where you feel the trade is no longer viable
 
William Roeder #:

You buy at the Ask and sell at the Bid. Pending Buy Stop orders become market orders when hit and open at the Ask.

  1. Your buy order's TP/SL (or Sell Stop's/Sell Limit's entry) are triggered when the Bid / OrderClosePrice reaches it. Using Ask±n, makes your SL shorter and your TP longer, by the spread. Don't you want the specified amount used in either direction?

  2. Your sell order's TP/SL (or Buy Stop's/Buy Limit's entry) will be triggered when the Ask / OrderClosePrice reaches it. To trigger close to a specific Bid price, add the average spread.
              MODE_SPREAD (Paul) - MQL4 programming forum - Page 3 #25

  3. The charts show Bid prices only. Turn on the Ask line to see how big the spread is (Tools → Options (control+O) → charts → Show ask line.)
    Most brokers with variable spreads widen considerably at end of day (5 PM ET) ± 30 minutes. My GBPJPY shows average spread = 26 points, but average maximum spread = 134 (your broker will be similar).

According to your first point, then is it true that I will exit the trade after losing 5 pips only even if if I specify 10 pips SL? And that is because of the spread which is between the Ask and Bid, am I right?
 
Husain Ballam #:  if if I specify 10 pips SL?

A SL is a price. PIPs makes no sense. Specify where?

If you place your SL ten (10) PIPs below the Ask and the spread is four (4) PIPs, your SL is effectually six (6) PIPs.

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