RESOLVED: Pepperstone: placed orders with 11pips slippage. It is legal?

[BotTrader]

Hi to all,
i'm new here

I began trading with bot, especially with a Night Scalper, and i've chosen Pepperstone as a suggested broker for good night condition for trading.

My bot placed 3 exactly same order, with the following characteristics:

PAIRS: CHFJPY
SELL LIMIT: 123.957
TARGET PRICE: 123.882

They were placed orders (so no lag involved). I'm operating under a VPS (Contabo).

The orders were executed at the price of 123.844, more than 11pips below my sell limit, and even below my target price.
Since my bot is scalping, these trades are already loss by the start.
Is that normal? There is anything i could do about this?
If that is the case, there is something i could do to prevent this?

I thank you all in advance, since i'm new (not only here but also in the forex world) and i would really benefit from an advice.

I'm available to further explanation and/or clarifications

 

[sebking1986]

All brokers experience slippage at 10pm GMT. Don't trade then to avoid it or set the bot to ignore trades with a higher slippage allowance if you keep it on.

 

[FxMaster]

Hi to all,
i'm new here

I began trading with bot, especially with a Night Scalper, and i've chosen Pepperstone as a suggested broker for good night condition for trading.

My bot placed 3 exactly same order, with the following characteristics:

PAIRS: CHFJPY
SELL LIMIT: 123.957
TARGET PRICE: 123.882

They were placed orders (so no lag involved). I'm operating under a VPS (Contabo).

The orders were executed at the price of 123.844, more than 11pips below my sell limit, and even below my target price.
Since my bot is scalping, these trades are already loss by the start.
Is that normal? There is anything i could do about this?
If that is the case, there is something i could do to prevent this?

I thank you all in advance, since i'm new (not only here but also in the forex world) and i would really benefit from an advice.

I'm available to further explanation and/or clarifications

Did you contact the broker about this?

 

[BotTrader]

Did you contact the broker about this?

Yeah, i'm waiting for an answer.
Today had happened again, 8 pips slippage.

I will update the thread once i get an answer

 

[BotTrader]

I got an answer from Pepperstone. I'm sorry: wall of text ahead.

History summary
- Lots of slippage on night trade Pepperstone. I've taken a case of 11pips slippage and sent a complain to Pepperstone with proper evidence.

- I received an automated email saying they will answer in 2 months. If i don't get an answer in that timeframe, they will tell me the reason for the delay. In both cases, they will answer until 3 months.
And if i'm not satisfied i can contact the regulators with an ID case they provided to me.

- After 2 days an "Account Manager" sent me an email informally asking me to quantify how much in my opinion is the loss caused by that slippage.

- I responded with "I have everything i need to answer correctly but i have to make proper calculations (from log files and a twin Pepperstone demo account which is not affected by slippage), but i can say it's from 200 to 300 euros. Is that information enough?"

- Now they've sent a answer. I see lots of Pepperstone consultant in CC.
Here it is:
Dear Roberto,

I hope you had a great weekend.

Thanks for your trade investigation request and sorry about the delay in our answer.

For those cases, you need to understand pending orders are trigger points and those are not guaranteed prices, that means if you set pending orders and the take profit is close to the entry point, it might happen those orders are opened around the rollover when the spreads are higher and the take profit is already below the entry point

That can keep happening as this is the way the platform is supposed to work, especially if you trade pairs that do not have as much liquidity as EURUSD and where the spreads are higher during the rollover. Knowing that it is totally up to you if you want to have pending orders around the rollover when our spreads are higher for those pairs.

We recognize that you are a valued member of Pepperstone and as a goodwill gesture we are willing to give you 100 euros back for those trades as you were not aware of this, however, this is not a precedent for futures trades and you need to understand that is a normal behaviaour for the platform.

Please let me know if you agree with that I will request that with the relevant department.

Looking forward to hearing from you.

Regards,
XXX

My questions (underlined)
- "For those cases, you need to understand pending orders are trigger points and those are not guaranteed prices, that means if you set pending orders and the take profit is close to the entry point, it might happen those orders are opened around the rollover when the spreads are higher and the take profit is already below the entry point"
is that true? I mean, i understand the concept of trigger points. That would be against the concept of limit orders. A buy limit means my limit for buying is the one i specified in the order. It has not be executed at first available price. It is NOT a market order, and i was a placed order: no price for my limit = no order execution. If my assumption is wrong, they could execute a 1$ buy order at a 1000$ buy price and tell me the same exact reasons.
Is that correct? There is a limit for slippage to occur?

That was the "i want to trust broker behaviour part".
Apart from that, it is true that Night Scalping EAs are recently increasing, efficiently and consistently making money from night trades. From lots of user experience with some brokers, it seems that orders within a threshold amount of lots does not cause slippage, but if you surpass that limit you have tons of slippage.
That threshold changes from broker to broker.
Having a threshold seems to be artificial to me.
I have no evidence for that, just user stories. Anyway it could be a convenient way to discourage night trades in order not to lose money.
Now the question:
How can we defend against that (other than avoid during night trades)? I mean, does regulators hold any powers to make brokers issue refund and/or fine them and/or making them stop this allegedly fraudulent behaviour? Or it's "part of the trading experience" and you have to deal with it and when it happens you can do literally nothing?

Sorry for the long answer, and congratulations and thank you if you survive to this point

I think i'm not the only user with this issue so i hope this topic could benefit others too

 

[FxMaster]

I got an answer from Pepperstone. I'm sorry: wall of text ahead.

History summary
- Lots of slippage on night trade Pepperstone. I've taken a case of 11pips slippage and sent a complain to Pepperstone with proper evidence.

- I received an automated email saying they will answer in 2 months. If i don't get an answer in that timeframe, they will tell me the reason for the delay. In both cases, they will answer until 3 months.
And if i'm not satisfied i can contact the regulators with an ID case they provided to me.

- After 2 days an "Account Manager" sent me an email informally asking me to quantify how much in my opinion is the loss caused by that slippage.

- I responded with "I have everything i need to answer correctly but i have to make proper calculations (from log files and a twin Pepperstone demo account which is not affected by slippage), but i can say it's from 200 to 300 euros. Is that information enough?"

- Now they've sent a answer. I see lots of Pepperstone consultant in CC.
Here it is:
Dear Roberto,

I hope you had a great weekend.

Thanks for your trade investigation request and sorry about the delay in our answer.

For those cases, you need to understand pending orders are trigger points and those are not guaranteed prices, that means if you set pending orders and the take profit is close to the entry point, it might happen those orders are opened around the rollover when the spreads are higher and the take profit is already below the entry point

That can keep happening as this is the way the platform is supposed to work, especially if you trade pairs that do not have as much liquidity as EURUSD and where the spreads are higher during the rollover. Knowing that it is totally up to you if you want to have pending orders around the rollover when our spreads are higher for those pairs.

We recognize that you are a valued member of Pepperstone and as a goodwill gesture we are willing to give you 100 euros back for those trades as you were not aware of this, however, this is not a precedent for futures trades and you need to understand that is a normal behaviaour for the platform.

Please let me know if you agree with that I will request that with the relevant department.

Looking forward to hearing from you.

Regards,
XXX

My questions (underlined)
- "For those cases, you need to understand pending orders are trigger points and those are not guaranteed prices, that means if you set pending orders and the take profit is close to the entry point, it might happen those orders are opened around the rollover when the spreads are higher and the take profit is already below the entry point"
is that true? I mean, i understand the concept of trigger points. That would be against the concept of limit orders. A buy limit means my limit for buying is the one i specified in the order. It has not be executed at first available price. It is NOT a market order, and i was a placed order: no price for my limit = no order execution. If my assumption is wrong, they could execute a 1$ buy order at a 1000$ buy price and tell me the same exact reasons.
Is that correct? There is a limit for slippage to occur?

That was the "i want to trust broker behaviour part".
Apart from that, it is true that Night Scalping EAs are recently increasing, efficiently and consistently making money from night trades. From lots of user experience with some brokers, it seems that orders within a threshold amount of lots does not cause slippage, but if you surpass that limit you have tons of slippage.
That threshold changes from broker to broker.
Having a threshold seems to be artificial to me.
I have no evidence for that, just user stories. Anyway it could be a convenient way to discourage night trades in order not to lose money.
Now the question:
How can we defend against that (other than avoid during night trades)? I mean, does regulators hold any powers to make brokers issue refund and/or fine them and/or making them stop this allegedly fraudulent behaviour? Or it's "part of the trading experience" and you have to deal with it and when it happens you can do literally nothing?

Sorry for the long answer, and congratulations and thank you if you survive to this point

I think i'm not the only user with this issue so i hope this topic could benefit others too

@Pharaoh is the man who can give your perfect answer on this

 

[Pharaoh]

First, I'd recommend if they ask how much slippage cost that you calculate the amount as closely as possible instead of giving them a ballpark estimate.

Second, how did the markets look when this executed? Active markets with moderate volatility are much better for precise execution than very flat markets (little/no activity, so less chance of some other trade at the LP matching your price) or very active markets (fast moving markets will blast right past your targets and 11 pips might actually be a bargain under these circumstances).

On thing you may want to consider is opening a small live account at one or two other brokers. Since these trades are pending orders, trade copy software should have plenty of time to send the order over to the other account(s). Then you can get a side-by-side look at spread, commissions, and slippage. Maybe there's a better broker out there or maybe 11 pips is the best you'll get at the times these orders execute. Side-by-side testing is the best way to be sure.

 

[BotTrader]

First, I'd recommend if they ask how much slippage cost that you calculate the amount as closely as possible instead of giving them a ballpark estimate.

Second, how did the markets look when this executed? Active markets with moderate volatility are much better for precise execution than very flat markets (little/no activity, so less chance of some other trade at the LP matching your price) or very active markets (fast moving markets will blast right past your targets and 11 pips might actually be a bargain under these circumstances).

On thing you may want to consider is opening a small live account at one or two other brokers. Since these trades are pending orders, trade copy software should have plenty of time to send the order over to the other account(s). Then you can get a side-by-side look at spread, commissions, and slippage. Maybe there's a better broker out there or maybe 11 pips is the best you'll get at the times these orders execute. Side-by-side testing is the best way to be sure.

Hi Pharaoh, the trades i'm referring to were executed after midnight, in the 0-1 am timeframe.
So if i understand correctly, there is nothing wrong/malicious and i have to deal with that, including finding strategies which limit or reduced excepted slippage.

If that is the case, do you suggest to accept the 100€ "good will" broker refund?
There is a limit of "tollerated" slippage, or slippage is "your risk" so once happen, you cannot do anything about that?
If brokers are "adding slippage" intentionally also you cannot do anything about that other than changing broker?

Sorry for the questions, i would like to know at my best which world were are in, so i can properly figure out any risk involved with it.

Thank you for your suggestions, i'll do it

 

[compu-forex]

BotTrader,

In principle I agree with you...my understanding of a limit order is that it should be all or nothing with fill done at your price or better. Unfortunately, after reading their T&C it seems Pepperstone does not apply this principle. I guess it is a short coming of MT4 that does not allow a pending order for a buy below market price that acts as a market order when triggered. Accordingly, Pepperstone are using a limit order to fulfill this purpose.

It is not ideal but they have declared it in the T&C so there is not much to be done. I don't like it but I guess it is not unreasonable given the MT4 limits. I suggest you take the money and try out some other brokers. I like Pepperstone but my requirements are different to yours. If they don't tick your particular boxes you need to find a broker who does.

 

[BotTrader]

BotTrader,

In principle I agree with you...my understanding of a limit order is that it should be all or nothing with fill done at your price or better. Unfortunately, after reading their T&C it seems Pepperstone does not apply this principle. I guess it is a short coming of MT4 that does not allow a pending order for a buy below market price that acts as a market order when triggered. Accordingly, Pepperstone are using a limit order to fulfill this purpose.

It is not ideal but they have declared it in the T&C so there is not much to be done. I don't like it but I guess it is not unreasonable given the MT4 limits. I suggest you take the money and try out some other brokers. I like Pepperstone but my requirements are different to yours. If they don't tick your particular boxes you need to find a broker who does.

Ok compu-forex, i'm 100% in agreement with you. And if their T&C contains this specific situation there is no much we can do other than accept the goodwill broker refund, which i will do.

Besides that, i'm asking now: do you know any broker which permit a "real" buy/sell limit order, working like the stock market ones?

Other than this, i also like Pepperstone, and how they handled my complaint.