How to avoid slippage in breakout and stoploss?

Discussion in 'Trading' started by qll, Feb 25, 2007.

  1. qll


    One thing I have found is that it is impossible to avoid huge slippage in breakout and stoploss. The slippage is so great that it is matter of profit or loss.

    Here is some examples.

    A stock is testing its support at 17, I set a market stop at 16.98. Yah, I got it filled at 16.8.

    Another stock is breakouting at $3, I set a buy 3.01, then I got it filed at 3.1 then it came back to $3.05.

    Not sure if my quote is not fast enough or my broker is stealing the slippage, or the specialists do.

    How do you guys handle this? I tried another method is when I see the liquidity at the support resistance is getting thin, I would jump in to take the liquidity. Is that how you do it? My method has a problem, there are a lot of hidden order and specialists counter trade me.
  2. Trade only highly liquid instruments. eRL futures move very fast during breakouts, but I'm never filled more than 1 tick away from my stop. Other e-mini futures like gold.....forget'll be lucky to be filled 4-8 ticks away. I am sure stocks trading on electronic platforms are the same way.
  3. zdreg


    part of your problem is your attitude. your broker is definitely not stealing from your order. . I suggest you brush up how markets work and set limits if you are. suspicious.
  4. (1) Position yourself before the expected breakout, not at a price that confirms" it after-the-fact. (2) Instead of using stop orders, consider using stop-limit orders. A market can trade through your stop-limit price and possibly retrace back to your limit saving you on slippage.
  5. Wow, that's an excellent suggestion...never thought of that !