Pending orders across midnight: session and swap surprises

[LondonScalper]

Pending orders left overnight have cost me money in ways that had nothing to do with whether my trade idea was right. Two separate surprises, both learned the hard way.

The rollover spread. At the server's daily rollover, which for my broker is at 22:00 London most of the year, spreads widen sharply for a few minutes. A buy stop placed a few pips above the market can be triggered by the ask jumping, with no real move in price at all. My first experience of this was a GBPJPY buy stop triggered at 22:01 by a spread that briefly reached 11 pips. The position was immediately 9 pips down.

The swap. If a pending order triggers just before rollover and I don't notice, I hold the position through rollover and pay or receive swap. On Wednesday nights it's triple swap. On a 2-lot position in a pair with a negative carry that can be meaningful.

What I do now: all pending orders are cancelled by 21:30 London, unless I've deliberately decided to hold one overnight. That decision has to be written down in the journal. In practice, I haven't left one overnight in about two years.

I also set the server's expiry field on every pending order. If I forget, the broker doesn't.

[Shadow Trader]

The 22:01 GBPJPY trigger is a classic, and I'd add that the problem isn't only buy stops. Sell limits above the market get filled the same way when the ask jumps, which surprised me more because I thought limits were safe.

The other surprise was the broker's server time. My broker's rollover moves with US daylight time, not UK, so for a couple of weeks each spring and autumn the spread spike comes an hour off from when I expect it. That autumn gap is coming up at the end of this month.

Your 21:30 cancel rule covers both cases nicely. I do the same but use the expiry field set to 21:00 server time, so the platform enforces it even if I'm away.

One thing to check is how the expiry works on your platform. On some MT4 servers expiry has to be at least ten minutes away, so a last minute order can't use it.

Do you treat Friday differently? Weekend gaps make the overnight risk much larger than one rollover.

[Shadow Trader]

The swap side deserves its own check, because triple swap isn't on Wednesday for every symbol. On one of my accounts the FX pairs and gold took triple swap on Wednesday night, while an index CFD charged it on Friday instead.

That matters for the late trigger you described. A pending order on that index that fills just before Friday's rollover pays three days of carry plus the weekend gap risk, on a trade meant to last twenty minutes.

So once a quarter I open the contract specification for every symbol I trade and note the triple swap day. Brokers do change these, and the platform won't tell you when they do.

The other safety net is an alert at 21:45 London if any position is open at all. It's just a phone notification with the symbol and size, which gives me fifteen minutes before the rollover spike.

Positive carry can tempt people to keep a triggered scalp overnight. I've never found that a good reason, because a trade designed for minutes has no plan for the next morning.

Has anyone seen the rollover spike last longer at month end or before holidays? Mine seems to stretch well past five minutes on those nights.