Avoiding spikes in the price


Active member
Price spikes often a single trade, which are out of kilter with the trend, seem to be compromising the profits of the longer term strategies I'm examining. So if I'd set an automated stop, it's likely the trade would be taken depending on the size ruining the strategy. If alternately I'd set up an alarm, by the time I'd checked whether to trade or not, the price would be back to normal. The disadvantage of the latter method is that sometimes the 'spike' might not be an anomaly, but a rapid generic move, and any stop loss protection is effectively lost.

Has anyone found a way around this problem, or find price spikes don't take you out of the market in practice? A large number of trades which cause these spikes in the less liquid markets I'm interested in, seem to be off-book between two parties, often first thing in the morning, but are recorded by the relevant exchange. An example is attached


  • spike.JPG
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