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Pending order executed far below price?
Nov 30, 2021 at 09:03
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10 Replies
Nov 30, 2021 at 09:03
Good morning,
i have a question to some issues concerning stop-sell-pending orders in combination with take profit.
Lets say i set a stop sell pending order of an asset that is actually moving around 100, and i set a stop sell order at 90, in combination with a take profit at 80.
That means i expect the price to fall, when price passes 90 the order is executed, when the price passes 80 take profit is hit and the position closed.
So far clear
BUT!: What happens if in a down spike, when the stop sell order is executed BELOW the take profit? Lets say price spikes down, my sell stop order order is executed at 70,
As 70 is also below the take profit i set at 80, should not the position be closed immediatly with zero profit or zero loss?
Thanks a lot!
i have a question to some issues concerning stop-sell-pending orders in combination with take profit.
Lets say i set a stop sell pending order of an asset that is actually moving around 100, and i set a stop sell order at 90, in combination with a take profit at 80.
That means i expect the price to fall, when price passes 90 the order is executed, when the price passes 80 take profit is hit and the position closed.
So far clear
BUT!: What happens if in a down spike, when the stop sell order is executed BELOW the take profit? Lets say price spikes down, my sell stop order order is executed at 70,
As 70 is also below the take profit i set at 80, should not the position be closed immediatly with zero profit or zero loss?
Thanks a lot!
Member Since Jul 23, 2020
816 posts
Dec 03, 2021 at 20:44
You didn’t count the spreads.
Dec 05, 2021 at 09:37
Thanks, that's exactly a very clever customer agent explained to me, after 5 agents couldn't find an explanation... cause that happened to a position I had opened.
Generally speaking, it is right that such a position is closed immediately, But to close the position ask price of the asset has to pass the take profit. If spread widens extremely in such a down spike, it can happen that ask price does not pass take profit, you have now an open sell order, and wnen price spikes up again, you get margin stopped out (without stop loss)
So that's right, the reason why take profit was not hit, was the large spread,
Generally speaking, it is right that such a position is closed immediately, But to close the position ask price of the asset has to pass the take profit. If spread widens extremely in such a down spike, it can happen that ask price does not pass take profit, you have now an open sell order, and wnen price spikes up again, you get margin stopped out (without stop loss)
So that's right, the reason why take profit was not hit, was the large spread,
Dec 05, 2021 at 16:48
i wanted to take that option, cause i saw that on the Norwegian Index that something like that happens nearly evey day - a huge down spike which spikes back in seconds.
So i placed such a pending sell order with take profit, and generally speaking, the decision was correct - what i did not take into account, was the huge spread in those spikes, cause i did not see the widened spreads when i scrolled back the 1M chart, i just knew, that that the average spread is around 1 full point. In the down spike, spread was suddenly aroung 10 points, and that was the reason, why that experiment crashed.
So i placed such a pending sell order with take profit, and generally speaking, the decision was correct - what i did not take into account, was the huge spread in those spikes, cause i did not see the widened spreads when i scrolled back the 1M chart, i just knew, that that the average spread is around 1 full point. In the down spike, spread was suddenly aroung 10 points, and that was the reason, why that experiment crashed.
Member Since Jul 23, 2020
696 posts
Dec 08, 2021 at 21:35
Do you open two orders or just one?
Member Since Aug 17, 2021
87 posts
Dec 11, 2021 at 19:02
This is a good choice, but it necessitates trader understanding.
Member Since Mar 16, 2021
447 posts
Dec 17, 2021 at 08:21
AliaDare posted:LukeRachel posted:
I think it's a good choice but some experience is needed here. If not, it will be very difficult.
Of course, without experience, things get really complicated.
Not just experience, I should control psychology. It is often the case that even with the knowledge of a good strategy, one cannot make a consistent profit. The reason is psychology. And that is what the trader always needs to manage.
Dec 18, 2021 at 01:07
LukeRachel posted:AliaDare posted:LukeRachel posted:
I think it's a good choice but some experience is needed here. If not, it will be very difficult.
Of course, without experience, things get really complicated.
Not just experience, I should control psychology. It is often the case that even with the knowledge of a good strategy, one cannot make a consistent profit. The reason is psychology. And that is what the trader always needs to manage.
Exactly, Psychology is very important. Where the success of many traders is stuck.
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