Sell stops trigger on the bid, but buy stops trigger on the ask

[Fairman]

Sell stops trigger on the bid, but buy stops trigger on the ask

Sounds basic, yet it catches scalpers over and over. A buy stop becomes active when the ask reaches the level. A sell stop activates when the bid reaches the level. Charts typically display the bid line only, so a buy breakout above a resistance can look like price touched the level without the order triggering.

The gap equals the spread. On a pair with a 0.2 pip spread, it hardly registers. On a cross or exotic with a 3 pip spread at off-hours, a breakout order can sit untouched while the chart looks like a clean break.

The reverse is equally annoying. A buy limit might fill on a quick dip while the chart shows price missing it by a hair, because the ask sank to the level while the bid line stayed higher.

The fix is switching the chart to display the ask line as well, and placing levels with the spread in mind, not the visual line alone.

Small detail, big cumulative effect over hundreds of trades.

Has anyone built a chart template that shows both bid and ask lines, and did it change entry placement?

[Fairman]

In MT4 you can turn on the ask line in chart properties, it's a checkbox called show ask line. It's off by default. Turning it on was a small revelation for me, especially on crosses in the late evening, where the gap between the two lines was sometimes 3 or 4 pips. A lot of breakouts I thought I'd missed due to bad execution were simply the ask never reaching my buy stop. The chart looked like a clean break, but only on the bid.

[Amanhasnoname]

This was behind an annoying stretch for me with pending orders on GBP/JPY. I kept placing buy stops a pip above a swing high that I could see clearly on the bid chart, and about one in four never filled even though the chart showed a clean break. For weeks I blamed the broker, until I sat down and compared the ask on the order ticket against the level I'd drawn.

The fix that really changed my results was a small adjustment to how I define levels. I now put pending buy stops at the level plus the typical spread for that hour, and sell stops exactly at the level, so both sides need the same real move from the market. For the pairs I trade, I keep a little table with the normal spread for each session so I'm not guessing.

Another thing worth checking is your stop loss on short trades. A short's stop is a buy order, so it also triggers on the ask, and in wide spread periods that explains some stops that looked unfair on the chart.