One should remember that there are two prices in the market: the price of sellers (Ask) and the price of buyers (Bid).
The chart shows the Bid price. Sell orders are executed at the Bid price; Buy orders are executed at the Ask price.
Consequently, short (Sell) positions are opened at the Bid price and closed at the Ask price. Long (Buy) positions are opened at the Ask price and closed at the Bid price.
For your short position (Sell), the Stop Loss order is set at the price of 1.2970. The price on the chart reached 1.2968, but that’s the Bid price.
Given the spread of 2 points at that moment, the Ask price was 1.2970 (i.e. Ask = Bid + Spread = 1.2968 +0.0002 = 1.2970), your position was closed, because Stop Loss orders for short positions are executed at the Ask price.
In this case, the Stop Loss order was executed correctly, because the Ask price reached the level specified in the order.
If trader’s funds fall below the required reserve funds, the broker has the right to close a part of loss-making positions at the current market price. Funds = Account balance + Results of opened transactions.
To open a position in a terminal window, right-click the selected tool and in the window which appears, choose "New order". After this you should set the parameters for the order and open the position by pressing the "Buy / Sell".
Buy Stop, Sell Stop, and Stop Loss orders are executed at the current price at the time of order processing. Buy Limit, Sell Limit, and Take Profit orders are executed at the price of the order.
The leverage is a ratio between the trader’s own funds and borrowed funds, which a trader borrows from his broker. 1:100 leverage means that for a transaction you must have a trading account with amount 100 times less than the sum of the transaction.
Lot is a unit of transactions in trades.
The Stop order is a trigger, and when it is reached, a corresponding order is generated.
There are Stop and Stop-Limit orders:
When the Stop order is activated, the Market order is generated.
When the Stop-Limit order is activated, the Limit order is generated.
The Stop order price is a trigger, and when it is reached, a corresponding order (market or Limit) will be generated.
Let’s suppose you purchased 1 lot EURUSD at 1.2291 and later closed the position at 1.2391. When opening the position, you bought 100,000 EUR, which is 1,2291 * 100,000 = 122,910 in USD. Basically, you acquired an asset worth 122,910 USD. When closing the position, you sold this asset worth 100,000 EUR, which, due to the price change, cost 123,910 USD (1,2391 * 100,000). Your profit will be 123,910-122,910 = 1,000 USD.
On Forex market, clients are charged with Rollover (Swap) charges for transiting the position over midnight. The amount of Swap depends on the difference between bank rates of the base currency and secondary currency in a currency pair. Swaps can have either positive or negative value.
RoboForex swap rates are established in accordance with swap rates from our liquidity providers. Current swap rates for each trading instrument can be found in "Contract Specifications" section of our website.
At weekends, the Forex market is closed, just like other global stock exchanges. However, cryptocurrencies are available for trading 24/7.
Trading currencies, stocks, and other investment products is of the market nature and always involves significant risks. Because of sharp market fluctuations, you may both make much of your investments and completely lose them.
You may manage the risks (the ratio of possible financial losses to profits) by using the leverage value, and specific types of orders (Stop Loss / Take Profit) or other available tools. You should always remember that the higher the leverage and possible profit, the higher the risk level.
A pending order is the client's order to buy or sell a financial instrument at the specified price in the future.
There are four types of pending orders:
Buy Limit — to buy, when the future "Ask" price is equal to the specified value. The current price level is higher than the value of the placed order. Execution of this type of order means that the transaction will be made at the price specified in the order or at the price that is lower. Orders of this type are usually placed in anticipation that the instrument price, having fallen to a certain level, will increase.
Buy Stop — to buy, when the future "Ask" price is equal to the specified value. The current price level is lower than the value of the placed order. Execution of this type of order means that the transaction will be made at the price existing at the moment when the order is executed, which may be different from the price specified in the order. Orders of this type are usually placed in anticipation that the instrument price, having reached a certain level, will keep increasing.
Sell Limit — to sell, when the future "Bid" price is equal to the specified value. The current price level is lower than the value of the placed order. Execution of this type of order means that the transaction will be made at the price specified in the order or at the price that is higher. Orders of this type are usually placed in anticipation that the instrument price, having rising to a certain level, will decrease.
Sell Stop — to sell, when the future "Bid" price is equal to the specified value. The current price level is higher than the value of the placed order. Execution of this type of order means that the transaction will be made at the price existing at the moment when the order is executed, which may be different from the price specified in the order. Orders of this type are usually placed in anticipation that the instrument price, having reached a certain level, will keep decreasing.
The Smart Stop Out logic in cTrader provides maximum protection to trader’s accounts. This logic will replace cTrader’s Fair Stop Out logic because it uses a much more advanced algorithm.
If Margin Level, which is shown in the balance bar (see image below for references) falls below Smart Stop Out Level, then positions will start being closed until Margin Level reaches above Smart Stop Out.
The Smart Stop Out logic will only close what is absolutely necessary from the largest position in order to safely restore Margin Level and protect the position itself, the position entry point and the trading account for as long as possible.
Your account has the following properties:
Smart Stop Out: 50%
Your account opens two positions of:
BUY - 200,000 - USD/JPY
BUY - 50,000 - USD/JPY
Both positions have the same entry price.
The account will immediately be left with a 100% margin level. Once 100% margin level is reached, no more positions which require additional margin can be opened.
Once the price of USD/JPY falls by 10 Pips, the Margin Level will become 50% and will trigger the Smart Stop Out feature.
Note: for simplicity's sake, we will not consider broker commissions and spread in this example in order to explain behavior of the Smart Stop Out functionality.
Once Smart Stop Out has been reached, cTrader will need to do something to restore the accounts Margin Level to be higher than Smart Stop Out. cTrader will partially close the largest position to release only the amount of margin necessary and nothing more, with the minor exception of rounding to the nearest 1,000 units.
In this case, the position of 200,000 USD/JPY will be modified to be 198,000 USD/JPY, by selling 2,000 USD/JPY.
Closing 2,000 USD/JPY at a loss of 10.2 Pips will cause a loss of $2.01. The loss reduces the amount of margin required to retain the position by $4. Below you will see how this event effects the account and the calculations used.
Balance: 497.99 USD
Margin used of 248,000 USD/JPY: 496 USD
Unrealized P&L: 249.64 USD
Equity = 248.35 USD
Margin Level = 248.35 USD / 496 USD = 50.07%
As a result, the account’s Margin Level has been increased to 50.07% which is just enough to be above Smart Stop Out Level with minimum impact on the trading account.
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