forex-scalping.com

Trader A takes a clean breakout on EURUSD. Entry 1.0842, stop 5 pips back, target 8 pips ahead. Price runs, target hit, plus 8.

Trader B takes the identical breakout one second later. The broker fills at 1.0843 after a small slip. Price runs, but stalls at 1.0849 for three ticks, and the target at 1.0851 is never reached. Reversal, stop hit, minus 5.

Neither trader did anything wrong in terms of analysis. The difference was one pip of entry and a spread that kept the exit price out of reach.

This is the part of scalping that tutorials skip. When profit targets are tiny, execution quality is not a side detail, it is the strategy. A system showing 60 percent wins on a chart can become a 48 percent loser after real fills, because every trade pays a toll in spread and slippage.

The fix starts with measuring. Log the intended entry price and the actual fill price on every trade for two weeks. The average gap is the real hidden cost.

What does the average slippage look like on the account people here use?

I ran exactly that test on my own account last spring and it was humbling. Over about 180 market orders on EURUSD the average gap between the price I clicked and the price I got was 0.4 pips, but that average was hiding a lot. Most fills were within a tenth of a pip, and maybe one in fifteen came in a full pip or worse, nearly always in the first seconds of a breakout.

The breakout entries were the real problem, because that is exactly when everyone else is hitting the same button. Switching those to a limit order a fraction behind the break cost me a few missed trades, but the ones that filled kept their full edge and the win rate on that setup stopped bleeding.

The other thing I changed was the target. I used to sit it right under an obvious round number, and now I pull it in a little so the bid can reach it even when the spread is a touch wider than normal.