forex-scalping.com

Between roughly 4:55pm and 5:10pm New York time, spreads on majors can jump from 0.2 pips to 2 or 3 pips without any news at all. The reason is the daily rollover. Liquidity providers pull quotes while positions are rolled to the next value date, and the book thins out for a few minutes.

For a scalper aiming at 4 to 6 pips, a 2 pip spread is not a nuisance. It is a third of the target gone before the trade even begins. Worse, stop orders sitting close to price can get triggered by the spread alone, since a long position closes on the bid and a widened spread drags the bid lower while the chart, which often shows bid prices only, looks perfectly calm.

Plenty of traders have a story about a stop hit at 5pm where price "never actually touched it." The chart was telling the truth about the bid. The ask just was not visible.

A simple rule many scalpers adopt is a hard no-trade window around rollover, with existing positions closed beforehand. Is that window part of the routine here, or does anyone actually trade through it on purpose?

That window is a hard stop in my routine and I learned it the expensive way. Early on I had a GBPUSD short running into the close with the stop seven pips away, and the spread blew out enough that it closed me at the ask while the bid chart barely moved. Took me a while to even understand what had happened.

Now everything is flat by 4:45 New York, no pending orders left on the book either, and I don't look at a chart again until about twenty minutes past. Where I am that is late evening anyway, so it doubles as a natural end to the day and stops me from squeezing in one more trade when I'm tired.

The one thing I'd add is to switch the chart to show the ask line as well. Seeing both sides spread apart during rollover made the whole thing click for me in a way that reading about it never did.