EURNOK 1H Pin Trade - Loss

EURNOK Trade

Honestly I was royally pissed with the outcome of this trade. In summary, I moved my stop to breakeven once I was about 0.5R in profits. However I was hit by a broker spike overnight which took me out for a whooping 0.42R loss. A freaking 300 pip spike, insane slippage, worst I ever had. I checked with three other brokers and while some did had a mini spike, it was nowhere near 300 pips. Look at the FxPro MT4 1H chart above, notice that the spike wasn't even there!

It annoyed me big time and I was about to call up my broker when I remembered that such things happen very often and there is no way to win the argument against the broker because Spot FX is unregulated and they're protected by written agreements.

As such, all I could do was to simmer down, reflect about it, and come up with two conclusions. First of all, I'm going to switch broker. Let me first shame this broker's name, it is CMC Markets. I checked through many of their charts (particularly the exotic pairs) and was shocked to find that such ridiculous spikes are very common. It is very obvious that the market maker is trying to gun the stops of their clients, they can easily do so because our orders are on their books and they know exactly where the stops are. How timely it is that I already set up a new broker account and had planned to switch to it in June.

Secondly, I'm going to stop trading illiquid/exotic pairs. I gave some thought to it, and asked myself this question: If I had ten million dollars to trade, would I be trading illiquid pairs? The answer is no, simply because of the risk of such black swan broker spike events. When one is managing huge sums of money, risk management is paramount and there is simply no room for such crap at all. I need to think and trade like a huge account trader. The majors and main crosses should provide me with enough opportunities that I do not need to undertake unnecessary risks with illiquid pairs. I guess you could say that it is a blessing in disguise that this happened to me now than in future when I'm trading a larger account.