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>>It does you no good to save a few $$'s on commissions if you are paying
$20-$40 slippage on a stop order. <<
In my experience the way IB handles stop / stop limit orders works well.
I make extensive use of STOP LIMIT orders for entry. I experience zero
slippage, and have perhaps had only one trade (only a partial fill of my
order) not be filled in all the time I've used IB. And frequently with
price improvement on all or part of the order.
For exit I use STOP and market orders. I've not done a comprehensive study
of this but anecdotally I estimate that > 50% of the time I am stopped out
at my stop price; the balance I'm stopped out 1 tick away and very rarely 2
ticks away.
Quite possibly the trader's approach may make a difference as to
suitability. I'm a lurker exploiting failure and IB has worked very well
for me as a tool.
Michael
At 02:47 AM 4/13/2001 -0400, Simon Campbell wrote:
>IMHO the way they handle stop orders is inferior to other systems like PFG
>Best Direct. IB places your stop order as "waiting" which means that it
>only actually gets transmitted when the price is touched. This process
>adds X seconds delay to execution and results in greater uncertainty on
>the fill. Your stop order is not timestamped or queued in order of
>priority when it was sent ...because it isn't even "sent" until the price
>is hit. By contrast, PFG places your stop order physically on Globex in
>advance. It's been timestamped and prioritised accordingly. Your fill is
>instantaneous when the price is hit.
Michael Watkins
Chief Technical Officer
watkins@xxxxxxxxxxxxxxxxxxxxxxxxx
http://IntelligentSpeculator.com
Technical Tools and Trading Techniques for Investors
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