Stop limit order-Avoid buying into falling prices

Discussion in 'Order Execution' started by antares66, Apr 14, 2019.

  1. Guess i want to buy a stock 5 cent above yesterday`s high with a limit of 6 cent.
    Yesterday´s closing price is 10 $.
    I could transmit a stop limit order with these conditions. But i want to avoid buying into falling prices. If today´s opening price is 10.30 $ and the price drops to my limit of 10.11 $ my order gets executed. If the price drops further i would suffer a loss immediately.
    I know i could transmit an attached stop loss order as bracket order (IB). But is there a way to avoid the stop limit order to get executed under these circumstances?

    Thanks
     
  2. Robert Morse

    Robert Morse Sponsor

    Buy 100 XYZ Limit 10.06 OPN only. The order should be treated like an IOC order for the opening auction. Let's hope that IB targets only the primary or you should choose that. If the stock opens at 10.05 or lower, you will get filled. At 10.06, maybe. You will get filled if the stock opens lower too.
     
  3. Metamega

    Metamega

    Your asking to buy only if price goes up after. That’s a holy grail situation.

    If you only want to buy if price goes below your entry price but then rallies back to your entry theirs really no order type for this.

    You’d have to code a strategy with some software or using brokerage API and program the algorithm for your entry criteria.
     
  4. A limit order on the open wouldn`t fit if the stock has a downgap the next day. Then you would buy below yesterday´s high.
     
  5. "What order type can I use so that I never lose money?"

    LOL
     
  6. Handle123

    Handle123

    If you can program, place a condition that on strong open above entry, price must comes back to such and such price below where you wish to get in, then stop limit orders sent in buying on strength. But there is no guarantee by close of day stock will be green. I prefer to entry other way of price dropping to a level, then risk is lower.

    Good luck.
     
  7. qlai

    qlai

    Yep. He wants to catch a break out as it is happening (the first time price is crossing the level) or pass on the trade. He wants no re-tests, if I understand it correctly.
     
  8. That´s a good question ;-) Hope i find an answer here ;-)
     
  9. That`s correct. I would like to trade a break out the next day but didn`t want to buy into a red candle. In my opinion the only way to handle this is to submit an attached stop loss order to get out of the position if the price drops below the stop level again.
     
  10. qlai

    qlai

    I think your best bet is to submit orders a few minutes after the open. You will miss some winners, but you will avoid lots of chop during the open. If you automated, you need fast broker and fast data feed to deal with the open.