Question for ES Traders - Stop LIMIT on Stop Losses?

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brownsfan019

Question for the seasoned ES traders - how well or not so well do you think a Stop Limit order as a Stop Loss would hold up on the ES?

Here's the reason for the question - those frustrating trades where price ticks my stop loss price sometimes for the blink of an eye. A stop market order obviously triggers. I am trying to minimize this, if possible.

The idea being that a stop limit order would put you at the back of the queue so a momentary touch *should* not tick you out. Of course there is a big catch - if price blasts through, you may not get filled. I understand that but I think the ES is liquid enough for this to be a non-issue. Maybe I am wrong.

I'm going to start testing this out:
> Initial Stop Loss sent as a Stop Limit Order.
> An emergency 'oh shit' stop as a regular Stop Market order below the first stop.

I trade through Open ECry and I think something like this could be created in their strategy builder.

It looks like Ninja has a nice feature as well that would accommodate this:
http://www.ninjatrader.com/webnew/trading_software_trade_management.htm

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I don't believe OEC has anything like this currently. That would be perfect actually.

In the meantime, are there any serious flaw(s) that I am missing here besides the fact that price could go right through my stop limit order and possibly not fill? I wouldn't dare try this on the YM or ER2, but I think the ES and possibly NQ could handle it.

Thoughts?
 
brownsfan,
A similar feature is also available in X-Trader and Zeroline trader I believe. Typically your stop is triggered once a certain volume trades or appears on the bid/offer. In addition to the risk you mentioned obviously the stop is held on your PC, not at the exchange or your broker - which is another risk.
All the best,
bolter
 
instead of worrying about your stop, maybe you should first spend your effort in re-evaluating your entry methodology?




by no mean I am saying your effort is not needed, but rather, the entry/stop relationship must be in place for the stop to be effective.
 
Quote from Tums:

instead of worrying about your stop, maybe you should first spend your effort in re-evaluating your entry methodology?

by no mean I am saying your effort is not needed, but rather, the entry/stop relationship must be in place for the stop to be effective.
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Nope, don't need to do that and don't want to go there with this topic.

Thanks for the advice, but this thread is not about stop placement.

I am trying to limit the trades where the stop is touched for seconds and then proceeds in your direction. This is not a regular occurrence, but enough that I am looking at ways to minimize this, if possible.
 
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