How does a profiting trade show up as a loosing trade?

[Anonymous]

I made the following sell trade at 3 lots opened at 10959.39. The trade went in the sell direction down to a level of 10899.97 yet the current price is listed as 11054.20 and the trade at a minus value of -284.43. Should it not be a gain of 284.43 dollars? I am confused. Were does the 11054.20 value come from? The BTC is not even trading at that dollar value at the time of this trade. Please explain.

[Anonymous]

Hello Leonard,

At the current moment, the Bitcoin is very volatile and the brokers keep huge spreads.

I see that at the moment you have opened the trade you have + $150 spread.

Now, the spread is the Ask price – Bid price.

When you sell you are selling on the Bid price. In your case, this was $10959. At the moment of the picture, the bid price is $10899. Also, you see this price on the chart.

And because you have a spread of + $150(I think around $155), your Ask price at the moment is $11054. And this price is higher than your entry price – $10959.

Your sell trade will be closed on the sell price. The sell price must get below the entry price so that you can see a profit in the account.

In simple words, I would not trade using brokers at the moment. And Pepperstone is a broker with one of the lowest spread for the Bitcoin.

If you are trading manually, you better use Exchanges like Coinbase. But even with Expert Advisors, it is really hard to do any profits on such a huge spread.

 

[Anonymous]

Hi Petko,

Thanks for the exclamation. It was very helpful. Now than, if I enter a trade when it is not volatile and it become volatile before I close the trade, will that trade be affected like this example I am sharing with you?

[Anonymous]

Hey Leonard,

No, we pay the spread at the moment we open the trade. This means that if you buy, you buy at the ASK price (the more expensive price). And this is why you see loss right after the trade is opened.

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