Trading gaps using a buy stop order?

[trendisyourfriend]

Hi guys, I've noticed the major indexes gap up or down a few % points on average about twice a week.

Let's say the SQQQ is setting up for a break out past the most recent swing high above the 60sma. If I enter a buy stop order at the base high (eg 55.67) with my broker, and the SQQQ gaps up 2% the next morning at the market open, will my order get executed at 55.67? Or will it skip past my order price?

Thanks

 

[lindq]

Hi guys, I've noticed the major indexes gap up or down a few % points on average about twice a week.

Let's say the SQQQ is setting up for a break out past the most recent swing high above the 60sma. If I enter a buy stop order at the base high (eg 55.67) with my broker, and the SQQQ gaps up 2% the next morning at the market open, will my order get executed at 55.67? Or will it skip past my order price?

Thanks

Assuming you're not enabled for premarket trading, you'll be entered at a market order at the market open, if your buy stop is below the market open.

That's one of the challenges of keeping buy or sell stops active in an overnight position.

 

[rb7]

Hi guys, I've noticed the major indexes gap up or down a few % points on average about twice a week.

Let's say the SQQQ is setting up for a break out past the most recent swing high above the 60sma. If I enter a buy stop order at the base high (eg 55.67) with my broker, and the SQQQ gaps up 2% the next morning at the market open, will my order get executed at 55.67? Or will it skip past my order price?

Thanks

Your order will be filled at the opening price.
Otherwise, it would be to easy...

 

[KCalhoun]

That's why I use buy stop limit orders.

I trade SQQQ daily. Bought a bit after today's close.

It closed 55.42. Let's say tomorrow it gaps up to 56.4

If I'd put in a buy stop 55.7 limit 56, no fill on open. If I used a buy stop 55.7 I'd be filled at 56.4 opening gap price.