Limit Loss instead of Stop Loss order?

For the past 6 months I have been trading SPY while taking my entry and exit signals from ES. I have used mental stops and it seems that once my stop loss price has been reached, 9 times out of 10 it will bounce between that price and the previous price for at least ten seconds before moving to a new price level.

Would this scenario work for ES:

Instead of :

Stop loss Sell order = 1012.00

Try:

Limit Loss Sell order = 1012.25 (This order would have to be transmitted as soon as the 1012.00 price is reached).

obviously this would work better if you were trading 1 contract as opposed to 200. It would also be a bad idea in a "fast" market. I am also thinking that you could have a market order ready to go if your limit loss order was not executed and price went one more tick against you.

I plan on switching to ES and want to try to use the larger tick size to my advantage.

Thanks
fan27

 

Why not just send a stop limit order?

 

You won't gain the extra tick from a stop limit order and you might not get out of a losing trade if the market is fast because of the limit component.