There are Forex brokers who require certain minimum distance for trading stops & limit orders to be met when trading.
In simple words, to a trader, this translates into a requirement to place stops on each trading position no closer than the X amount of pips from the entry point, or from the current price if they modify an already open position.
It is trader’s job to know about these limits and rules and decide whether to accept the conditions, while we’re going to focus on the facts:
When speaking about brokers, this measure helps them to prevent any system abuse, quote delays abuse etc, as well as stop unwanted scalping activities.
For traders this brings several additional conditions to deal with:
1. When a trader opens a position, the initial spread is paid. A trader is required to place a stop at a certain minimum distance. He is, basically, asked to bid another X amount of pips which cannot be claimed back.
Should a trade go wrong? Will a trader not be able to close a position sooner than after a minimum required distance? That means a loss on each unprofitable trade cannot be smaller than X amount of pips.
(When a trade was placed by a mistake, which could happen, the cost of closing such trade will be again no less than X amount of pips).
2. The requirement for a minimum distance for stops & limit orders eliminates any possibility to use scalping tactics effectively.
3. The same requirement can interfere with some EAs, which might not work properly under such conditions.
Forex Time (FXTM) – Limit & Stop levels – 0.5 – 2 pips.
ActivTrades – EURUSD spread 1.6-2 pips, limit order, TP, SL distance – 5 pips minimum away from the current price.
AL Trade – EURUSD spread – 2 pips, limit order distance – 10 pips away from the current price.
Citypoint Trading – Example for EURUSD:
Limit Order Placement 20 pips from current market price
Stop Order Placement 20 pips from current market price
EXNESS – EURUSD – 1.2 pips stop level distance for pending orders.
FBS – EURUSD Stop Loss, Take Profit and pending orders minimum distance is 2 pips.
Finexo – EURUSD spread 3 pips, stop-limit order distance – 8 pips.
ForexCent – EURUSD stop order distance – 6 pips.
FortFS – Limit & Stop levels – 2 pips Limit, 10 pips Stop.
FXOpen – Stop Loss, Take Profit and Pending Orders 10 pips or more away from the current price.
FXOptimax – Fixed spread accounts – EURUSD spread 2 pips, stop order distance – 5 pips.
FxPro – For pairs with the maximum spread of fewer than 5 pips the limit must be placed at least 5 pips from the market price.
GO Markets – Pending orders can be placed 2 pips (20 points) away from the current market price.
HotForex – EURUSD limit and stop levels distance – 3 pips.
HY Markets – minimum distance for EURUSD – 4 pips.
MFX Broker – Example for EURUSD:
Limit Order Placement 5 pips from current market price
Stop Order Placement 30 pips from current market price
IFC Markets – Minimum Limit and Stop Order setting range may vary from 1 to 7 spreads from the market price depending on current market’s liquidity.
(1-3 pips on Majors).
MAYZUS – EURUSD Stop Loss minimum distance – 2 pips, Take profit minimum distance – 2 pips from the current market price. The minimum distance varies depending on the account type.
RoboForex – EURUSD limit & stop levels distance – 2 pips.
Saxo Bank – EURUSD Stop Order minimum distance – 20 pips from current market price.
XM – EURUSD Stop Loss minimum distance – 5 pips, Take profit minimum distance – 5 pips from the current market price.
Vantage FX – minimum distance 3 pips for TP/SL from the actual price.