Short stop-outs that make no sense on the chart

[Shadow Trader]

A short position closes on the ask, so a stop loss on a short triggers when the ask touches it, not when the chart does. That one fact explains a surprising number of stops that look unfair. Here are the overlooked parts.

- The chart shows the bid, so the candle high can finish below the stop while the ask went straight through it. The gap is the spread at that moment, which is not constant.

- Spreads widen around rollover, news and thin Asian opens. A stop that was comfortable at a normal spread of one pip can be hit by a spike of four or five pips without the bid moving at all.

- A bid chart shows no trace of spread widening, because it does not paint a candle. The trade history then shows a close price that appears to sit outside the candle range, which feels like a data error and is not.

- Take profit on a short sits on the ask too, so the target needs the market to fall by the spread on top of the distance. A target set at the exact low of a previous swing often misses by a hair.

- Longs have the mirror image. Their stops trigger on the bid, so long stops line up with the chart and look more honest, which is partly why the problem is noticed more on shorts.

The spread spike case is the nastiest one. A stop placed a few pips from entry on a tight scalp has almost no cushion against a spread that doubles for a few seconds. Some traders stay out of the rollover window completely for exactly this reason, and others widen the stop to cover the typical spike on that pair.

It is also worth checking whether the broker runs a floating spread or a fixed one, since fixed spreads remove the spike but often come with other trade-offs.

How many of your unexplained short stop-outs line up with rollover time, and did the spread log confirm it?