Your thoughts on using buy stop orders to enter a position?

[NinjaTrader_Ray]

I use stop limit orders to enter on a break out of a range. The upside is your catching momentum but risking slippage with the use of the limit price. The downside is that the move can pass you by since you don't get filled. If you fade the move, then a a standard limit order on retrace is applicable. Point is, stop/stop limit orders have their place just as limit orders do on entry.

 

[speedo]

I generally do except when my S/R stop is too far away in which case I place a limit entry.... which sometimes fills and sometimes doesn't. If I have a valid signal, I like to be in the trade.

 

[Zestilio]

Always nice to have extra insurance. I try to use stop orders whenever possible.

 

[2rosy]

not a stop but a stop limit. one good thing is that you order is sitting at the exchange (assuming futures) so latency shouldn't be an issue

 

[AbbotAle]

Yes zrosy, I forgot to mention, when I enter via a stop it's always with a limit on that stop. I mainly trade Cable and fix the limit at 2 ticks (big ticks). Button Trader makes this slick.

When entering via a stop you have to be able to accept slippage but the last thing you want is crazy slippage like 10+ ticks. Yes, it's rare (assuming no figures) but it can still happen.

 

[patrickrooney]

Great point @AbbotAle. There are multiple ways to configure a stop order and this goes for the trigger as well as for the order that enters the market. The link below provides a brief description of the stop configurations available on the TT platform.

https://library.tradingtechnologies.com/trade/auto-tt-algos.html#tt-stop

 

[Abundance Magnet]

I've read that buy stops are a good way to enter a position and is a strategy use by some top traders. I've also read that stocks that open up on the day are statistically more likely to close higher... Anybody heard of that or have the research on that?

 

[Abundance Magnet]

I've read that buy stops are a good way to enter a position and is a strategy use by some top traders. I've also read that stocks that open up on the day are statistically more likely to close higher... Anybody heard of that or have the research on that?

This is for swing and long term position trading. Obviously, this approach is not appropriate for day trading

 

[profitlocker]

Yep. Stop-limit the way to go for momentum entries. Missing a major move makes my blood boil more than slippage does.

 

[profitlocker]

This is for swing and long term position trading. Obviously, this approach is not appropriate for day trading

Very appropriate for daytrading momentum based strategies