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> The downside to a stop-limit order (where the limit and stop price are the
> same) is that the market blasts right through the stop price leaving you
> unfilled.
You can use a wider collar to better insure getting filled. I use
stop/limits
at the same price to get in and stop/limits with a wide collar to get out.
In neither case is slippage generally a factor.
BW
----- Original Message -----
From: "Simon Campbell" <simtrader@xxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Monday, November 19, 2001 4:47 AM
Subject: Re[2]: Profit Taking --- Round 2 --- Other Alternatives
> A stop-limit order is one order, not two (don't let the fact that it has
> two prices confuse you)!
>
> Suppose you want to get long on a breakout above a recent high spike, then
> you would place a Buy Stop-Limit order above the market. Once the stop
> price is touched, the order instantly becomes a limit order at the limit
> price. By specifying the same limit price and stop price, you guarantee
> that no slippage can occur. This order is a bit like entering a stop
order
> ....but one where you pre-define what slippage, if any, you are prepared
to
> accept.
>
> STOP-LIMIT ORDER: becomes a limit order when the the stop price is touched
> STOP ORDER: becomes a market order when the stop price is touched
>
> The downside to a stop-limit order (where the limit and stop price are the
> same) is that the market blasts right through the stop price leaving you
> unfilled. The order will still remain active: it just sits there as a
> plain limit order until you cancel it. When you use a stop-limit order,
> you are effectively saying "I only want the trade at X price or I don't
> want the trade". By contrast a plain stop order which becomes a market
> order would have filled you somewhere. I have seen a stop-limit order in
> the NQ go unfilled but it is very rare. My preference for zero slippage
on
> entry makes the use of stop-limits a great tool for initiating a new
> trade. For stop-loss orders, you need to guarantee that you are "out"
> which means that a plain stop order is the best one to use.
>
> S.
>
> At 02:52 AM 11/19/2001 -0800, you wrote:
> >If you enter an order like that what stops you from being stopped
> >out about 1 second after you get filled?
> >Doesn't your stop become a market order as soon as you are filled?
> >
> >NS
> >
> >
> >SC> Right! e.g. Buy 1 NQ 1608.50 stop 1608.50 limit.
> >SC> Works best only with online systems where the order is sent to rest
on
> >CME
> >SC> servers, not held on broker's local servers (where the chance of not
> >being
> >SC> filled increases due to time lag in execution e.g. Interactive
Brokers).
> >SC> S.
>
>
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