forex-scalping.com

A trade closes at a price that never appeared on the chart. The take profit was at 1.08550, the chart high of the minute was 1.08548, but the fill happened at 1.08550.

The explanation is almost always the bid and ask difference. A long position closes at the bid. A sell take profit gets triggered by the ask. Charts in most platforms draw the bid price only. A sell trade that closes at 1.08550 needed the ask to reach that level, which might not appear on a bid chart.

The same effect explains stops that trigger when the chart seems not to have touched them. A short position's stop loss triggers on the ask, and the bid chart doesn't show it.

It's easy to see the mismatch as unfair when it's just a display choice. Turning on the ask line in the platform settings gives a more complete picture of what happened.

When reviewing trades, using both bid and ask makes the history consistent. Without it, a lot of "stop hunt" suspicions come from simple price-source differences.

Has the ask line ever settled a suspected stop hunt?

It did for me, and it was a little embarrassing because I'd already written a fairly angry email to support. I was short EURGBP late in the evening and my stop was hit, but the bid chart showed price stopping almost two pips short of my level. I was convinced someone had reached in and taken it.

Turning on the ask line settled it in about ten seconds. The spread had opened up to nearly three pips around the rollover, and the ask had touched my stop cleanly while the bid barely moved. Nobody had hunted anything, I had just put a tight stop on a short in the widest part of the day.

Ever since, the ask line stays on permanently on every chart I trade. I also changed how I place stops on shorts, adding the typical spread for that hour to the distance rather than measuring from the bid chart alone. It cut down the number of trades that I felt were stopped unfairly, and my reviews stopped turning into arguments with the broker.