Saturday, March 24, 2012

A Typical Slippage

I placed an order for entering long at 3374 in the morning. The price actually reached my price and headed to 3375 towards the end of morning session. My position was never filled and closed at 3375.
It opened with a gap in the afternoon at 3384 with the low of 3379 and it never plunged to my price of 3375.
You maybe right in placing a price when trading, but the slippage could kick you out of the trade.

Lesson Of This Trade: I should place 2 prices or more instead of just 1 price

1 comment:

  1. Morning session O=3361,H=3375,L=3359,C=3375
    Afternoon session O=3384,H=3436,L=3379,C=3426.

    You mentioned placed order in the morning to LONG at 3374 but not entered even price touch 3375 in the morning session. -- Are you place Stop Limit Order ? (I guess you order should be : Buy Stop 3374 Limit 3374.)

    Yes. Gap may causing us miss the trade not only on entered, it could be miss from exiting the trade. Sometime it is hard to manage it unless you are willing to pay for slippage price of your desired trade.
    This gap & slippage is one of the factor need to be consider but hard to be managed in back-test and setup parameter finding.

    In your chart you show missing the trade 2 times. (In the Lesson statement, you also mention should place order for 2 prices instead of 1 price.) -- Do you mena you suppose to have another order place at 3383~3384 in referring high of 22-Mar-12 (H=3383)?
    If that the case, your order should be look like : Buy Stop 3374 Limt 3384 where you are willing to accept slippage of 10 points. By then, most likely you will not miss this trade.

    A bit sad that you miss the trade out from 2 potential trade that with good profit. I wish you will able to catch this type of oppotunity in the future.
    Good luck.