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| StopLoss & Pending Orders over weekend - gaps https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=656 |
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| Author: | r2997790 [ Fri Jun 29, 2012 9:48 pm ] |
| Post subject: | StopLoss & Pending Orders over weekend - gaps |
Hi everyone, I have a simple question I wonder if anyone could answer for me... let's say you have a StopLoss in place on a trade and it 'gaps' over the weekend .. is your StopLoss honoured at the price you set or is it done on retrospectively when the "market opens" on Sunday night at what could be a worse price? I had the same question relating the Pending Orders.. are they entered at the price you set (if within the 'gap') or the market price on the re-opening of the market. Thanks very much to anyone who can clarify this for me! Cheers R |
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| Author: | garyfritz [ Fri Jun 29, 2012 10:01 pm ] |
| Post subject: | Re: StopLoss & Pending Orders over weekend - gaps |
A stop effectively becomes a market order once the stop price is exceeded. You get what the market offers at that point. If it gaps past your stop price, too bad for you. There's nobody willing to pay your stop price now, and your broker is not obligated to do so. The same thing happens on a smaller scale if the market suddenly zooms through your stop price. If you have an order to buy at 1.2000 and the market suddenly shoots up from 1.1995 to 1.2050, you might get filled anywhere between 1.2000 and 1.2050. It just depends on how the Ask moves and where your order is in the queue. Different people on different crims might get totally different fills because their crims' liquidity providers might jump the Ask smoothly or 50 pips at once. Some markets (e.g. some futures exchanges) accept a "stop limit" order. That's a stop that can only be filled at a specified price or better. But if the market gaps past your price, that means instead of getting a BAD fill, you get NO fill. If you won't accept the market price, you won't get filled. And the market might not come back to your price for a long time. If you're worried about weekend gaps, the only protection is to close or hedge all positions on Friday. |
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| Author: | r2997790 [ Sat Jun 30, 2012 7:24 am ] |
| Post subject: | Re: StopLoss & Pending Orders over weekend - gaps |
Gary, thank you for your crystal clear and generous reply. Your post in a worthy example of why this site is such a wonderful forum for forex discussion. Helpful, knowledgeable people willing to help others and share information. Much appreciated. Cheers R |
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