Dissection of a trade $EURUSD

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This is the particular trade in question...

$EURUSD long at 1.39030 / stop @ 1.3913 / closed on stop loss @ 1.39106 +7.6 pips 2/1/2010 11:55 2/1/2010 17:38




While the slippage is always a problem that bothers everyone, it is not the 'main' thing that concerned me about this particular trade. Though, while we are on the subject of slippage I would point out that...

With *my* broker...

1> My limit orders always execute at the exact price requested, regardless of market conditions

2> My entry orders always execute at the exact price requested, regardless of market conditions

3> It seems to be ONLY on stop loss orders that slippage occurs, and on stop loss orders slippage occurs on just about every single order that is hit. It certainly seems to be, appears to be, a case of double charging the spread on every trade that is unfortunate enough to hit a stop. I can see where if a company were to be executing 100's of thousands to millions of trades per day a 1 or 2 pip slippage on every stop loss hit would add up to some considerable change... With a simple 'oops, sorry about that' as an explanation...


It seems very curious that slippage, which we are told cannot be helped/controlled due to 'market conditions', seems to ONLY happen to a traders detriment... Never to a traders advantage.

Can someone please explain to me, especially if market conditions are an issue, why it is that slippage ONLY occurs to the detriment of traders and never to their advantage? When *I* have a TP/limit set at say 1.3943 I NEVER get out at 1.3941... (ie; slippage in my favor)

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Now, if you don't mind, I would like to point out the real issue I had with the trade we are looking at here...

The main thing that bothered me is the fact that my stop was placed at 1.3913

The spike lower that occurred bottomed out at 1.3917

The 'normal' spread on $EURUSD is 1.5 to 2 pips

Even though the low was 1.3917 and my stop was 1.3913 somehow my trade closed at 1.39106

If you add the low to the executed close you get, not a 2.4 pip slippage (from my stop), which is bad enough, but really a 6.4 pip spread on $EURUSD on TOP of the low?!

Do you see what I am talking about here? I felt/feel my stop should have been 'safe' at 1.3913 with a 1.3917 low on $EURUSD but even though the low was only 1.3917 my stop somehow managed to execute, not at 1.3913, where it was set, but 6.4 pips lower than the lowest price, at a price that was never really even approached.

The 'spike' itself is bad enough on a 5 minute candle from a high of 1.3931 to a low of 1.3917 only to close at 1.3929. I would sure like an explanation of exactly what causes a spike like that so I can improve my trade planning in the future.

Is this spike a result of Central Banks 'seeing' a lot of stop losses piling up in an area and the spike, intentional, to vacuum up all those stops/money? In other words, is it an example of direct market manipulation by Central Banks?

It is my own personal belief that there is a lot of market manipulation going on these days... By the United States government, the U.S. treasury, the Federal Reserve banking system including Central Banks, and I'm sure plenty of brokers as well, equity and forex. It seems that everyone needs money these days no matter what they have to do to get it...

I'm writing this hoping someone will be able to help me better understand the environment in which I am trading. I have a personal need to understand everything I can about not only execution issues but also the 'inside scoop' on what is obviously, to anyone who wants to look, market manipulation.

Please let me know everything you know about Central Banks and how they operate when it comes to retail traders...

Thank you for your time.

Greg