forex-scalping.com

Where my exits slip, market vs limit for taking profit

I wanted to know whether my exits were costing me, so I looked at how I took profit over a few months. I split them into limit orders sitting at my target and market orders where I closed by hand.

The limit orders were filled at the target price almost every time, or sometimes slightly better. There wasn't much to say about them. The manual market closes were different. When I closed by hand during fast moves, I often got a worse price than the one I clicked on, especially around session opens. The difference was small each time, but across many trades it was real.

That told me two things. First, using a limit order at the target is better when I'm sure about the level. Second, manual closes should be reserved for situations where I really need to get out, and I should do them when the market is calm if I can.

For stops, I can't use limits, so the only way to improve is to avoid the times when slippage is worse and to give the stop room.

Something I noticed after doing a similar review is that the manual closes were not just worse on price, they were also often earlier than the plan. I would see a candle against me and bail, then price would go to the target anyway. So the cost was not only slippage, it was also giving up part of the move. Splitting exits into planned limit fills and discretionary closes, and then checking how each group did against the original target, showed me how much of my result came from nerves rather than the market.

For stops, the only thing I found that actually helps is avoiding the moments where slippage is worst. I do not hold through high impact releases, I close before rollover when the spread blows out, and I am careful around the first minutes of a session open. That does not remove slippage, but it reduces the worst cases. I also check the stop fills on the statement every month so I know what normal looks like. If the slippage suddenly gets worse, that is something I would raise with the broker.