How to model and measure the risk in spread variation

Discussion in 'Automated Trading' started by Rapunzel, Feb 5, 2022.

  1. Rapunzel

    Rapunzel

    Hi folks,

    I'm work on a trading model that will be fully automated in a lower timeframe (M15). I do not normally trade timeframes lower than H1 and a big problem for the success of the system will the the risk of widening spreads, since the SL and TP distances will be relatively small.

    I was just wondering if you have come up with or can point to anY good ways to assess the short term risk of spread variation.
     
  2. qlai

    qlai

    Hm, tight stop losses on illiquid stocks? I don’t think it’s practical.
     
  3. Rapunzel

    Rapunzel

    fx, but your point is valid