How can foreign exchange control the slide point? Under what circumstances will foreign exchange slip?
How can foreign exchange control the sliding point? Under what circumstances can foreign exchange slip? The so-called sliding point refers to the phenomenon that there is a difference between the designated trading point and the actual trading point given by the customer when trading. The slip point often appears in the market price list, but when the market quotation fault occurs, the trigger of limit order will also lead to the occurrence of sliding point. Significant slip points usually occur together with significant risk events. In addition, when the market trading is light, the market volatility will be amplified, leading to the expansion of the sliding point. In addition, a series of programmed trading limit orders are triggered by an unexpected price fluctuation, resulting in currency pair flash collapse.
What are the consequences of sliding? Take a look at the most famous event, namely the Swiss Franc Black Swan incident. On January 15, 2015, the Swiss central bank suddenly announced the cancellation of the lower limit of the euro / Swiss Franc exchange rate that has been maintained since September 2011, leading to the biggest shock in the market since the 1970s. The catastrophic slide point caused by this major event still affects the entire foreign exchange market, and major banks have suffered hundreds of millions of dollars in losses and crushed No There are not enough brokers,
Advantages and disadvantages of sliding point
There are both good side and bad side
Take the euro / dollar slide point as an example. We choose to do more than one euro at 1.1310, and the stop loss is placed at 1.1305. When the market slides, the final stop loss price will slide to 1.1295, which means that we will suffer an extra loss of 10 US dollars.
But what happens if we choose to short the euro at 1.1310 and stop earnings at 1.1305? Our short list, the final transaction price will also be 1.1295, that is to say, this order will be 10 dollars more profit out of thin air.
The key is to cultivate traders' awareness of intraday risk, and not be affected by a bad slide point, resulting in the situation of open positions.
How to control the sliding point
From the analysis of the causes of the slip point, its essence is the limitation of the trading link and the uncertainty of the market.
1. From the point of view of transaction system and link design, the closer the physical distance is, the better the fluency and stability of the system will be.
2. From the perspective of market uncertainty, intraday traders should avoid trading in the period of major risk events such as light market trading, the Federal Reserve's interest rate resolution or non-agricultural data. Fierce market volatility may seem tempting, but it's hard to get the expected price. If you are trading at this time, you may face a significant risk of slippage.