Bid-only charts quietly punish short stops

[Amanhasnoname]

Standard charts are built from bid prices. A long is opened at the ask and closed at the bid, while a short is opened at the bid and closed at the ask. That asymmetry is where bid-only testing goes wrong.

Say a short has a stop at 1.08520 and the spread is 1.0 pip. The stop triggers when the ask reaches 1.08520, which is when the bid sits at 1.08510. The bid chart never printed 1.08520 in that moment, so a naive test says the stop survived while live it would have fired. The same logic works against short targets: the ask has to fall to the target, so the bid needs to go a full spread lower than the chart level.

Long exits are close to correct on a bid chart, because both stop and target trigger on the bid. Long entries still pay the spread.

Net effect: bid-only tests tend to flatter the short side more than the long side, and the gap grows with wider spreads and tighter stops. Split the results into long and short books. If shorts look weaker after ask-side handling is added, that may be mechanical rather than anything about the market.

Does your short book diverge from your long book once ask-side fills are modelled?