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October 3, 2017

Question:A price on cTrader's chart jumped to an extreme price for a moment and came back to the normal price. What just happened?

Answer:

Sometimes, it happens that a market price jumps to a completely another level of price range and comes back to the normal level in a moment.

In many cases, it is impossible to react within that moment. Thus it can cause many pending orders to be executed.

This event is also called “Bad Tick” or “Stop Hunting”(in case the event was caused intentionally by a broker or Liquidity Provider).

Example of Bad Tick

This is often caused by a brokerage firm(your broker) or the side of liquidity providers.

Of course, such price movement is impossible, so this “Bad Tick” is considered as an error within the system, even if the event was caused intentionally in order to “Stop Hunting”.

Many brokers do adjust the error and restore all unreasonably closed positions.

This “Bad Tick” is completely a different event from “Price Gap” which is often monitored when a market opens on Monday.

Example of “Price Gap” during weekend

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