Stop loss not triggered?

It would seem that setting a stop loss can protect a trader from various problems and limit the size of potential losses in advance. But where do accounts with negative balances and lost deposits come from?

These are primarily accounts that weren't opened with stop orders, but that's not what we're talking about here. In practice, situations often arise where a stop loss simply doesn't trigger.

These aren't common, but they do occur, so any trader should be prepared for such surprises.

1. The first and most common type is a Forex gap , which occurs quite frequently, and the stop loss is triggered only after the price gap is complete. The gap itself can be 50 pips or more, meaning that if your position was losing money before the gap, your loss will be equal to the gap.

The size of the stop loss is irrelevant ; the position will be closed at the first available price, as specified in each broker's trading conditions. Try to avoid trading during times when a gap is especially likely to occur, typically holidays and weekends.

2. Slippage - in this case, the risk is less significant; typically, a couple of pips are simply added to the stop loss, but this makes the situation even more frustrating.

Slippage can occur in two cases: a slow connection to the server and high price movement.

3. Broker's fault - this can involve outright fraud, where a broker deliberately drains a client's deposit, which is extremely rare.

In addition to the options listed above, don't forget about the trailing stop . This order only works when the terminal is turned on. Many traders are surprised when it doesn't work after turning off the computer.