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Stan
08-16-2010, 07:38 PM
Hi Jim,
the topic's name is Absolute Beginners, so I am not ashamed to ask here about some basic terms that are used as parameters descriptions in EAs. Could someone explain and describe what are the following parameters: Slippage, StpMode, StartTrading and StartRange? Thanks in advance.

Jim
08-16-2010, 08:53 PM
Hi Stan,


Hi Jim,
the topic's name is Absolute Beginners, so I am not ashamed to ask here about some basic terms that are used as parameters descriptions in EAs. Could someone explain and describe what are the following parameters: Slippage, STP? Thanks in advance.

Hi Stan,

Some of those are specific to the London Breakout EA, so I'll repost them (http://community.trading-gurus.com/threads/8-MQL4-London-Breakout-System?p=160&viewfull=1#post160) over there. Of the more general ones:

Slippage (http://en.wikipedia.org/wiki/Slippage_%28finance%29) refers to those all too frequent occasions when you place an order at a specific price, but when that order is ultimately executed by your broker you receive a different price. For some strange reason the revised price is far more often unfavourable to your bottom line than the other way around!

As an example let's assume you wanted to trade a breakout on GBP/USD today. At 8 AM BST this morning the high of the day so far was 1.56435 or thereabouts. You place an order to go long GBP/USD if the price rises to 1.56440, expecting that if your order is executed you will be charged that price. When that eventually happened, at around 13:44 BST, you might have discovered that your broker charged you a different price, lets say 1.56460. That's slippage!

STP is short for Straight Through Processing (http://en.wikipedia.org/wiki/Straight-through_processing). The idea here is that your broker quotes you the same price they themselves are quoted by the banks that provide their liquidity, possibly with an added mark-up if that's one of the ways your broker makes their money. If you then choose to trade at that price the bank fills your order, not the broker. If you suffer any slippage blame the bank, not your broker! Make any sense? Any more buzzwords that now need defining?

Jim