trailing stops off a limit vs market price

Discussion in 'Order Execution' started by zdreg, May 5, 2006.

  1. zdreg


    on IB it is my understanding that a trailing stop is based upon the current mkt. price.
    if the mkt. price is bouncing all over the place doesn't the fact that you don't what the mkt price is make the trailing stop useless as IB doesn't tell you what the mkt. price is when the order is transmitted
  2. zdreg


    wouldn't i be better off if i could have a trailing stop off some limit price
  3. A trailing stop is not based on the current market price.

    A trailing buy (sell) stop is based on the maximum (minimum) market price to occur between the time your order became active and the present.
  4. zdreg


    a trailing stop is based upom the current price when entered. for nasdaq stocks it is based upon the current bid. or the current ask..
    the issue is that the quote moves so fast
    that you don't know the starting point for the trailing stop.
  5. Oh, now I see what you are saying. I'm not sure if there is a way to see the starting price. I think there might be a way, but I don't know.
  6. ddunbar

    ddunbar Guest

    Why not use an Adjustable stop as opposed to a trailing one?

    Granted, you only get a one time adjustment. But that might be a good thing.

    ex. Set your original stop @ 10 tick loss. If market goes 5 points in your favor, adjust stop up to break even. Then let your position ride or have a predetermined exit as part of a bracket order.
  7. zdreg


    thx for your answer which is a near perfect solution.
  8. emk662


    Do you guys know how to set a bracket order using this adjustable stop in the hotkey? Their interface is too confusing.