spread tp & sl calculation question

[fxnoob]

hi. this is my first post on T2W

could someone help me work this out please. i am a noob and on demo trading on forex.

i am using SLM and learning on the pound vs dollar.

i have a spread sheet to work out entries,stop losses and take profit levels, but am seeing a discrepancy on the spreadsheet to what i see in p&l in pips on the MT4 terminal.

the spread = 2 pips. price on my screen is displaying the bid/sell. if i want to buy gbusd @ 1.61500 and type that in ask/buy box of the order popup.

question 1 - what price will i see on my screen for that order to be executed. 16148?

question 2 - if i want to make say 42 pips + the 2 pips spread (so 44), what price will i need to enter in the order popup on the bid/sell price and what price will i seen on my screen?

it's just that i worked it out on my spreadsheet taking spread into consideration and would buy @ 16500 and then sell at 1.61940
this = (2 pips spread to 1.61520 to b/e on trade and then +42 pips from ask price to bid price) which on s/sheet = +44, but actually on the terminal in p&l of pips this is showing +46pips if i closed at 1.61940

this example is buying, i assume the sell side will be the same?

a bit confused... if anyone can help out, would v grateful..

thankyou very much..

fxnoob

 

[Shakone]

If the bid/ask spread is 16148/16150, then that means someone is willing to sell to you at the price of 16150. So if you buy, then you get filled at 16150. You could place a limit order at 16148, which 'might' get filled, but might not, unless price moves lower.

So if the bid/ask was 16148/16150, and you wanted 42 pips worth of profit, you click buy, get filled at 16150, and set a limit order to sell at 16192.

 

[fxnoob]

thankyou for your quick response shakone.. that's what i had a wile back on my s/sheet, but then i loooked at it and it didnt make sense..

how is the spread paid for in your example though?... if i buy at 16150.. that's the price i have entered market at... the spread automatically has me down -2 pips assuming 2 pip spread.. so don't i need the screen bid price at 1.6150 to make up the loss to b/e (which means the ask price is 16152.. then add +42 profit to the ask bid price to exit = 44 total - 2 pips spread??

 

[Shakone]

Yes, you've bought at 16150, you're automatically down two pips. Set a limit order at 16192 for a 42 pip profit. Now suppose the price goes to a bid/ask spread of 16190/16192 that doesn't mean your limit order was filled. Because although you're offering to sell at 16192, you'll still need someone to buy at that price from you, and the current buying price is 16190. You 'could' be filled here, if someone decides to take your price. Other times, you will need price to move up to 16192/16194 or higher to be filled at 16192 or better.

 

[fxnoob]

thanks shakone.. i understand that there has to be a supply and demand as such for the transaction, but i'm trying to ascertain in a an exact science way what the perfect scenario (i know it's rare on the live market) should be to gain the pips required..

my current stats using the terminal as reference appear to have me allowing for the spread twice because i appear to be +2 pips better off as opposed to the s/sheet calc

which is tp sell exit target minus buy entry....1.6192-44 (42+2spread) would equal an ask entry of 1.6148 wouldn't it? with a bid exit of 1.6192?

sorry i understand to a degree what you are saying but the calc is confusing me in relation to what i actually see on the platform.

 

[fxnoob]

just an update.. still an't figure it out..for the examples here i am talking pefect scenario fill wise...

i just sold gbusd (good move lol)... i had selll limit at 1.6274 and drew a line on the chart.... so when price on my screen touches that line (as candles on my screen represent the bid/sell) then my order should and was triggered..

i was prepared to lose 24 pips in total (including spread).. which i did i think.... can someone tell me what price my line for sl should appear at on the chart (considering price is shown as bid/sell) and the price required in the sl box on the order..not sure if i lost 24 or 26 pips..


would the line be better off drawn at the bid price and then add 2 pips and type in the sl?

confused.... thought i had it all worked out but the discrepancy form the s/sheet to the actual terminal display has thrown me.. -