Trailing stop failure?

I am still practicing and today something nasty happened, I hope it’s not a bug or malfunction of the trailing stop feature, but it was pretty scary. If it had been real money I would probably quit using Trafing 212 or at least quit using trailing stops at all.
As you can see on the screenshot I was winning 2232 Eur, by shorting NZD/JPY… I set my trailing stop at abt. 80 pips distance. At 23.00 my position was closed by the trailing stop, but according to the screenshot attached, I lost 1300 Eur, leaving me with only 900 Euros and the reported closing price was 69.752. This is totally impossible, even on a 1 minute resolution chart it is clear that the the price never went up that high, it topped at 69.623.
Can you please advise why the trailing stop produced a closure at a much higher price than the set price distance and more importantly, how come it recorded a closing price which has never happened. Thanks.

I’m not familiar with CFD that said I can see you opened a short position with an average of 69.872 in the first screen shot, and the price is 69.589 so you are up 2232.88 from the price falling.

In the second screenshot the price is already at 69.612 going back up towards your average price so you are making less profit.

The trailing stop (that we don’t get on Invest/ISA :face_with_raised_eyebrow:,) appears to be at 69.571

Shouldn’t that stop be set above the current price when you needing to buy to close? Protecting it from going higher not lower.

But isn’t that chart tracking the sell price, the 69.752 would have been a buy to close (not shown on the chart) ?

Most probably, you’ve been tracking the SELL chart which is irrelevant for your sell position. If you switch your chart to BUY price chart, you’ll notice that 69.752 was reached.

P.S: Whenever you are in a sell position, right after the opening - the BUY price chart becomes pertinent for your result.

Thanks for your prompt response. Sorry, but I have to disagree. The price 69.752 was never reached. I was using the iPad version of Trading212, but now I have checked into the the buy chart on my Macbook (see screenshot enclosed) and you can see that the price at the trailstop closing at 23.00 (aug 19) was around 69.620. Anyway, such a huge spike should be clearly seen on the chart, irrespective of the timeframe

. Could you please send me a screenshot showing that the price 69.752 was reached?
The second point I want to make that on the IOS version of this trading platform it is not immediately obvious in which chart you are, buy or sell and I could not even find out how to change between the charts. In any case, such a change should be automatic by the platform once a sell position has been opened. (just an idea…)

You need to look at the BUY chart on CFD.

Your snapshot doesn’t represent the BUY chart, make sure that you change the chart settings. Press the right mouse button on the chart -> chart settings -> mark buy price chart only

I will attach a screenshot where you can easily notice that the price was reached.

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There’s no such instruments as GBP/USD, NZD/JPY (FX pairs) in Invest :v:

Very good point! (redacted for clarity) Morning coffee needed :coffee:

So basically an unlucky candle with a 69.763 high took out the stop, before the price dropped.

Screenshot 2020-08-20 at 09.41.26

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Many thanks for your explanations, it was a good lesson to learn. A scary and expensive (1200 Eur) lesson. :grinning:

I as a newbie can make the following conclusions/observations:

  1. If a trailing stop occasionally fails to stop at the set distance and it makes you lose about 60% of your profit, then it defeats the purpose of its existence.

This time, if I had not activated the trailing stop, I could have ended up winning over 2200 Eur, but due to this rare and lone spike I ended up with only 900. (Mind you, if the spike had gone as high as the stop loss, I could have ended up with a net loss)

  1. I figure, if a price rises very fast, during the seconds or fraction of seconds it takes for the trailing stop to execute the close order the price continues to rise, causing me to lose a major part of the profit. But then again, if these spikes can occur “without any prior notice” practically anytime, than using the trailing stop is quite risky, isn’t it?

  2. At exactly 23.00 when the spike occurred, the spread was 69.765 against 69.607, that is 158 points, ten times wider than the normal spread of this currency pair. Is it normal? Also, this lone spike occurred at one of the lowest volumes, so it was not due to a volatility but rather, it seems like an action of someone wanting to manipulate the market. At least, this is what it seems to me, but I might be wrong.

  3. I have been using the IOS app version of Trading 212, on an iPad. On this version I have been unable to find any icon, button or setting adjustment allowing me to change between the buy chart and the sell chart.

Even on the web version this feature is buried in the settings menu, (right mouse click, etc.) whereas in my opinion it should be more easily accesible from the main screen and it should even be made automatic, like it is done on other trading platform (Plus500). Just an idea.

Thanks again.

Why has it failed - It seems to have done exactly what it says on the tin? Afaics you had a trailing stop in place, it followed the action down, stayed where it was and then got collected on a high on the way up. It was a combination of having the stop a little too close and an unlucky candle where the action switched where it was pushing higher but it failed and dropped again.

Remember a stop is just a trigger point to create a market order. So you are saying give me your best price once it hits that point. If its moving quick or gaps then it could be higher/lower than you wanted when the order the stop created executes.

Setting the distance slightly further in hindsight would have prevented it. Or if you were sitting in front of it watching the action ready to make the closing buy yourself instead of having it automated, you might have seen that the break higher was about to fail and take the decision to keep it running. Without seeing L2 and the tape it’s a tough call.

It’s pretty hard to say just how much of a shadow could be created at any one point. It’s a fine line of working out where the action is and making sure it has enough wiggle room so it can continue running without taking it out earlier than you wanted.