IB Setting Trailing Stops

D

DisciplinedHedg

One more trading platform question for IB:

Does anyone know how to set trailing stops on IB's TWS without using the excel macros?

ie. You bought at stock at 20, and its at 25. To protect my gain, I'd like to set a trailing stop in either points or percentages, such that if it drops that amount its triggered, but if it continues to rise, the trailing stop rises along with it, until a pull back triggers it.
 
Originally posted by version77
Will IB ever have trailing stops? And if not, why not? Other
brokers do. What's up with IB?
More...

Really?...which brokers do? None that I'm currently using have trailing stop orders.

In fact, IB is the most versatile of the 3 I have (Datek, Schwab).
 
Originally posted by version77
Will IB ever have trailing stops? And if not, why not? Other
brokers do. What's up with IB?
More...

IB Management disagrees with the idea of trailing stops. Until they change their minds I doubt the platform will directly support it. Personally I can't see how trailing stops and regular stops loss orders are any different, and yet they support regular stop orders.

http://www.interactivebrokers.com/html/email/answers/stops_trailing.html
 
Cyber at least did have them. They resided on your PC, so there was the risk of your stops not being there if your machine failed.
 
Originally posted by TriPack


IB Management disagrees with the idea of trailing stops. Until they change their minds I doubt the platform will directly support it. Personally I can't see how trailing stops and regular stops loss orders are any different, and yet they support regular stop orders.

http://www.interactivebrokers.com/html/email/answers/stops_trailing.html
More...

After reading the IB info, I had your same thoughts. Trailing stops are the same as limit stops. After thinking about it, I actually see their point, though I still think they should allow trailing stop orders. There is a built in doomsday scenario, which I guess they believe in enough to not provide trailing stops.

For those that don't understand, I'll clarify, because I didnt understand at first also. Assuming you know what a trailing stop order is, lets just say most people set a trailing stop of 3-8%. A trailing stop is like a car (your trailing stop) behind of another car (the market price). As the price moves up, so does your trailing stop. ALONG with the trailing stops of everyone else. So as more and more people use trailing stops and the stock is in a clear uptrend, the pile of trailing stops begin to grow. Eventually, there is a huge pileup of trailing stops right below the market price by 3-8%. So should the stock stall and fall back 3%, the first of the bunch of trailing stops are triggered causing market sell orders, which of course trigger the other stops right below them. Eventually you have a huge bunch of market orders piled up when the stock is only down 8% because it triggered all the trailing stops. So the stock crashes 30% to fill all these orders. It will of course rebound, but only after the huge imbalance is relieved.

Again, I disagree with this scenario. It is rare if that. And the doomsday scenario only happens if very rare conditions are met.

But i guess IB is protecting the market just as the NYSE protects the market by putting in trading curbs.
 
It's the same thing with technical stops. Take any intraday 1- or 5-minute chart. You know many of the daytraders have sell stops right below a key pivot point and when the price falls just below it how many times does a bunch of red candles appear as everyone's stops are triggered?? Many times. Same with breakouts to the upside. As soon as the stock clears a hurdle, say yesterday's high, all of a sudden the market explodes briefly.

Trailing stops using a fixed price or percentage buffer zone would be useless since it'll most likely work out at a point that makes no technical sense whatsoever.

Software that would identify key pivot points and place trailing stops right below them . . . now THAT would be interesting.
 
The problem with the doomsday scenario is that IB represents only a small slice of the market action, and could never influence the market as a whole to a great degree. If it was nationally mandated that trailing stops be used by everyone, then I could see that happening. Being competitors, they should give us one more tool to compete with the rest of the market, but I believe manually placed stops near key S/R is superior anyway, so I probably wouldn't use automated trailing stops.
 
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