Fast market Lesson: Stops can get rejected

I

IAS_LLC

So my trading platform/system was trading for the first time in a fast market today (I shut it down for the last couple of days, out of fear). Market taught me a lesson, and exposed a flaw in my execution logic: The market will reject stop orders if the market is already below the stop price, leaving a position un-hedged. I should have known this.... but I didn't, and almost got bit. Fortunately, I was paying attention and was able to manually step in quickly and turned a 80 tick loss into a 20 tick gain (via luck, not skill).

Moral of the story.... be careful out there, especially when you're auto-trading and your system is walking into unfamiliar territory.
 
IAS_LLC said:
So my trading platform/system was trading for the first time in a fast market today (I shut it down for the last couple of days, out of fear). Market taught me a lesson, and exposed a flaw in my execution logic: The market will reject stop orders if the market is already below the stop price, leaving a position un-hedged. I should have known this.... but I didn't, and almost got bit. Fortunately, I was paying attention and was able to manually step in quickly and turned a 80 tick loss into a 20 tick gain (via luck, not skill).

Moral of the story.... be careful out there, especially when you're auto-trading and your system is walking into unfamiliar territory.
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ok maybe I'm missing something.....
 
What do you mean? I entered a bracket order, got filled on opening leg, but the the market blew through where my stop would have been before it hit the exchange. I assumed I would just get a market order in this situation, but rithmic or cme rejected the stop
 
IAS_LLC said:
What do you mean? I entered a bracket order, got filled on opening leg, but the the market blew through where my stop would have been before it hit the exchange. I assumed I would just get a market order in this situation, but rithmic or cme rejected the stop
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you would get the market fill if you had a standing order in place.
 
sss12 said:
you would get the market fill if you had a standing order in place.
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Not necessarily. A fast market can jump a stoploss order. Even a stop loss needs a counter party to trade with. If everyone is running for the hills and price has moved far from your stop it may never fill.
 
I think the stop rests on rithmics servers, until the open is filled. If the burst that filled the open took the market down through where the stop is supposed to be(which is what I believe happened), the stop never would get a chance to rest on the exg. Can't rest the stop prior to the open getting filled.
 
I hear you... I had a stop that blew straight thru my limit and executed at a much lower price to exit my long on NQ trade yesterday... UGLY!

but this is the very first time it has happened in over a year that I can recall... it is rare and I still firmly believe in stops on every trade
 
Traderjohnsblog said:
Not necessarily. A fast market can jump a stoploss order. Even a stop loss needs a counter party to trade with. If everyone is running for the hills and price has moved far from your stop it may never fill.
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I meant in general..the OP's order essentially was never placed since the market had moved past the limit level.
 
John9999 said:
I hear you... I had a stop that blew straight thru my limit and executed at a much lower price to exit my long on NQ trade yesterday... UGLY!

but this is the very first time it has happened in over a year that I can recall... it is rare and I still firmly believe in stops on every trade
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a stop or a stop limit order ?
 
sss12 said:
I meant in general..the OP's order essentially was never placed since the market had moved past the limit level.
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Correct, and I got a reject message to inform me of such....but, like a fool, I didn't plan for this situation and was left unhedged for a bit.
 
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