In today forex faq, we have a question regarding the forex broker from one of our trader.
Below is the question:
I read recently that your broker will not honor your open trade and/or Stop Loss or even guarantee the same spread level over a weekend if there is a spike and a gap when the market opens on Monday. Is this true? So what happen if the trade goes against you. Will the broker allow the trade to go beyond your SL and wipe you out?
I have not had this problem before and therefore I believe that all brokers will honour your setting. However if you are talking about spike, you will not be wiped out as long as you have set your stop loss, but you will lost several pips more due to slippage that occurs for large spike in price.
Slippage is something that occurs for all brokers due to the sudden increase or decrease in price. Due to this sudden movement in price, the system will not be able to exit your position in time and therefore may cost you several pips more.
As for the question above saying that the broker will not honor your open trade and stop loss, I believe that it should be the work of those rogue brokers.
Therefore if you are serious about trading, you must only use those reputable brokers. Do not be greedy and sign up with broker that you do not know but offer your bonuses or better spread.
As a trader, we are trying to make money and be able to draw it out. If you are using a broker that are not reputable, there is a higher chance that you will have problem when withdrawing your money. My personal advice is to use brokers that are recommended by your friends or by people that you trust.