Stop Order Usage

Discussion in 'Order Execution' started by regough, Mar 18, 2003.

  1. regough

    regough

    I have used Stop Loss orders from day 1 of my trading(thankfully, probably why I am still trading:) )

    My question is this: Is it possible(and/or advisable) to use a stop order to get you IN to a trade- for instance, if ES has bounced along at 850 for a few hours and I think that if ES breaks 850 to the downside it may "crumble"- can I put a stop order to sell at say 845 and another stop order to buy at 852(just in case, it doesn't "crumble" when it hits 845?
     
    #1     Mar 18, 2003
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  2. Bouds

    Bouds

    Hi

    I use "stop loss" orders to enter a trade quite regularly, especially if it is at a trendline or S/R break level.

    Not sure if this function works with all trading platforms but can't see any reason why not. I trade out of the UK using a UK platform that does offer this functionality.

    Being completely stop loss disciplined, what I should like to see is for a linked stop loss order to to be activated once the first stop entry order is filled. Don't know of anyone that offers this.

    Bouds
     
    #2     Mar 18, 2003
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  3. Magna

    Magna Administrator

    Of course you can put a sell-stop order at 845, or a sell-stop-limit order if you are afraid of a fast-moving down-market triggering at 845 and filling you much below that. As to the buy-cover order at 852, most platforms don't allow those orders in advance, usually you have to wait until you're filled on your sell-stop, then enter the protective buy at 852 (maybe linked to a target buy at, say, 835 etc.) A lot of it depends on your software.
     
    #3     Mar 18, 2003
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  4. Bankedout

    Bankedout

    If you use Interactive Brokers, you can link your entry stop order to your exit stop order. This is available in recent TWS builds.

    Banker
     
    #4     Mar 18, 2003
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  5. Gene Weissman

    Gene Weissman

    Just a note. Stop orders are accepted by the NYSE & AMEX specialists . NASDAQ Market Makers does not accept stop orders. If you use stop orders on NASDAQ, it's a function of the software.


    Stop orders can be used to protect a long position or close out a short position .You can also use stop orders to buy "breakouts" . Assume I'm long 1000 shares of XYZ at 50 and 51 is a "breakout' on the upside. I could put in an a stop order on the NYSE to buy 1000 XYZ stop @51. When the stock trades at 51, my order becomes a market order to buy 1000 XYZ. Buy using a stop order to buy the breakout, I will not miss the breakout in the stock .



    Gene Weissman
    E-Brokerage, LLC
    gene@ebrk.com
     
    #5     Mar 18, 2003
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