forex-scalping.com

Short blunt one: a stop order on a long position triggers on the bid. At rollover the bid can drop a pip or two for no market reason at all, just because the quote provider widened the spread and the bid side moved with it.

The chart shows a normal candle. The trade log shows a stop-out at a price the chart never really traded, at least not on the ask-based view most platforms default to.

This is why a lot of traders swear that stops get hunted at 5pm. Sometimes it's a hunt, but more often it's a mechanical artifact of a widening spread plus tight stops. A stop sitting 4 pips from entry on a pair that normally spreads 0.2 is fine. The same stop during a 3 pip spread is basically at the market already.

A few scalpers solve this by simply not having any pending stop orders live in that window. Others widen the distance for those minutes. Neither is perfect, and neither is a risk management lecture. It's just matching the stop to the actual spread that exists at that time instead of the one that shows during the day.

Has a stop ever been triggered at rollover in a way the chart couldn't explain?

Yes, and it took me a while to work out what had happened. I had a long on AUDUSD with the stop about five pips under entry, and the next morning I found it closed at the low of a candle that, on my chart, never came close. Only when I switched the chart to show the bid line did I see the spike that took it out, right at the rollover minute.

What I do now is pull the hard stop for that window and replace it with a mental stop plus an alert, but only for the twenty minutes around the reset. Outside that window the stop stays on the server like normal, because I don't trust myself to watch a mental stop all day.

The other change was in how I size the stop for anything I might hold through the evening. If the trade could still be open at rollover, I size it as if the spread were three pips wide, which usually means a smaller position rather than a tighter stop.