Chasing 0.5R on a pair where round-trip cost is a large share of the stop

[FXS London Scalper]

A simple calculation that I wish someone had shown me early.

Say you scalp with a 4-pip stop. Your round-trip cost (spread plus commission plus average slippage) is 1.2 pips. That means cost alone is 0.3R on every trade, before the market does anything.

Now you aim for a 0.5R target, which is 2 pips.

• Winning trade: +2 pips minus 1.2 cost = +0.8 pips net, so 0.2R.
• Losing trade: −4 pips minus 1.2 cost = −5.2 pips, so −1.3R.

To break even you need to win roughly 87% of the time (0.2 × W = 1.3 × (1 − W)). Very few strategies do that over hundreds of trades.

Change the target to 1.5R (6 pips) with the same cost:

• Win: +4.8 pips, 1.2R.
• Loss: −5.2 pips, −1.3R.

Break-even win rate drops to about 52%.

So small targets aren't wrong in themselves. They're wrong when costs are a big fraction of the stop. Either widen the stop and target together, trade at times when costs are lowest, or switch to a cheaper instrument.

What's your cost as a share of your typical stop? If it's above 20%, I'd be very careful with small targets.

[Shadow Trader]

Price spikes through a round number, grabs a few stops, and reverses. Cue the comment about brokers hunting stops. Sometimes that's true. More often there is a less dramatic explanation.

Round numbers collect orders from everybody: stops, take profits, option strikes, bank orders, retail pending orders. A lot of resting interest sits in the same place. When price reaches it, there's a burst of trading, and the burst creates movement in both directions. The reversal comes because the fuel ran out. Orders were triggered, liquidity was consumed, and nothing was left to push further.

That changes how to trade it. Instead of blaming the broker, treat round numbers as areas of high activity and unpredictable direction, where spread and slippage costs also peak.

None of this rules out a bad broker. A feed that spikes through levels on only one platform and not on others deserves suspicion. But that's a measurable claim, and measurement beats suspicion.

Has anyone compared the price action at a round number across two different brokers at the same moment?