I would like some opinions on this. (Not a demo account) Monday 10/17/05: Charts indicating downtrend in EUR/USD after Friday's pop into 1.2100 area. Easy to see. Mid morning I'm short at 1.2057. Market drops below 1.2030 within about a couple of hours. My stop loss is at 1.2060. Market begins to retrace and I exit at 1.2037. 20 pip winner. I walk away for an hour to take care of some other business. When I return I'm thinking sell again if market conditions are right. Market is now trading just above 1.2000 and I'm waiting for a break below to go short again. When I open my deal station I notice that I am long at 1.2060 and suffering close to a 60 pip loss. My immediate reaction is WTF?? I didn't go long at 1.2060. Didn't take much time to realize that I had forgotten to remove my stop loss at 1.2060 on my earlier trade and I was filled at that price. My mistake. But I'm still wondering how in the hell does a stop loss order become a limit order if the original order is exited and the stop not removed?? Is this a common thing with all FX brokers?? Stupidest damn thing that I ever heard of. If you are flat how can a stop loss even exist? I used to trading futures where if I'm flat, there is no possibility of a stop loss being filled.
Because some people use a stop order to get into a position. Your broker takes an order, he doesn't know what other positions you may have on.
Yeah I know. A stop limit not a stop loss. Who enters a position with a stop loss order?? Stop loss orders are exit orders everywhere else in the trading world.
Plenty of people. I may be getting mixed up with your terminology here but the only stop limit order I am aware of is one that is still a stop (obviously) but instead of doing market, you do market with a defined slippage limit. I know plenty of people that enter positions using either (in my part of the world) Europe!
A stop loss order is an EXIT order. A stop limit order is an ENTRY order. Some people refer to them as simply stop orders but there is a difference.
Yeah a stop loss is an exit but I don't think you can actually put in a stop loss. You put in a stop (limit or market) your broker doesn't really care if you are getting in or out of a position. You had in a stop (to you it's a stop loss but to your broker it's just a stop order) some people use them to enter.
There are two types of oders on my dealing station. (Excluding market orders) Stop loss and limit. It makes sense that limit orders can be used for entry or exit. But it makes absolutely no sense that a stop loss order can be used as an entry order. In the furures markets a stop loss order means exactly that and nothing else. Intended for one purpose only. To exit a loosing position. Never used to enter a position. The terminology is very simple and easy to understand. I just think that my particular broker has other ideas about what a stop loss order is. If it is something different in FX markets, then it should not be called a stop loss order.
Well I have never heard of a stop loss in futures, stop yes, stop loss no. My brokers would take a stop but not a stop loss.
Hell if my broker refused to take a stop loss order, I would find another broker. Big difference between a stop loss and stop limit and if the broker wants to simply refer to both as a stop order, then he most likely doesn't understand or care about your intentions. Definately not my kind of broker.
That is the point: your broker doesn't care about your intentions. This is why (in futures) a terminology has been created to avoid misunderstandings.