Stop loss not working?

It would seem that setting a stop loss can protect a trader from various kinds of troubles and limit the size of possible losses in advance, but where do accounts with negative balances and drained deposits come from?

First of all, these are accounts that were not opened with stop orders at all, but we will not talk about them; in practice, situations often arise when the stop loss simply does not work.

There are not so many of them, but they do occur, so any trader should be prepared for such surprises.

1. The first and most common option is gap forex , the phenomenon occurs quite often, and the stop loss is triggered only after the price gap is completed.

The gap itself can be 50 points or more in size, which means that if before the start of the gap your position had a zero result, then the loss will be equal to the size of the price gap. the size of the stop loss is not important ; the position will be closed at the first available quote; this is stated in the trading conditions of each broker.

Try to avoid trading at times when there is a particularly high probability of a gap occurring, usually holidays and weekends. 2. Slippage - in this case the risk is not so great, usually a couple of points are simply added to the size of the stop loss, but the situation is even more offensive.

Slippage can occur in two cases - due to slow communication with the server and high speed of price movement.

3. Through the fault of the broker - there is a fact of direct fraud, when the broker simply deliberately drains the client’s deposit, which is extremely rare.

In addition to the listed options, you should not forget about trailing stop ; this order only works when the terminal is turned on; for many traders, it comes as a surprise that it does not work after turning off the computer.