Clarification of SetStopLoss and SetProfitTarget

[simple_goodoboy]

Hello,

I am using the Order Management Approach, with SetStopLoss, SetProfitTarget, and Entry Limit orders.

I understand the SetStopLoss and SetProfitTarget behance as OCO orders.

I am concerned what happens if price actions moves so fast and my profit target or stop loss price order is skipped. This happens alot on the /CL market.

I understand that SetStopLoss orders are entered as stop loss market orders.

For example, if my SetStopLoss is set at 50.78 ans SetProftTarget was set at 51.00. Example if for the long position case.

1. What happens if price jumps below the stop loss order to 50.75? Will the order trigger at best price?

2. What happens if price jumps above profit target order to 51.05? Will the order trigger at best price?

Thanks

[NinjaTrader_AlanP]

Hello simple_goodoboy,

If your long entry order was filled and by the time your stop and profit target had reached the exchange, the price had broke lower than your stop price, the stop order would be rejected. If the price had moved higher than your profit target, your profit target would be filled at the best bid, so a better price.

Please let us know if you need further assistance.

[simple_goodoboy]

Hello simple_goodoboy,

If your long entry order was filled and by the time your stop and profit target had reached the exchange, the price had broke lower than your stop price, the stop order would be rejected. If the price had moved higher than your profit target, your profit target would be filled at the best bid, so a better price.

Please let us know if you need further assistance.

Thank you AlanP for the response.

Lets assume the stop price and profit target price was at the exchange and both orders was pending execution waiting for either order to trigger.

1. What happens if price jumps below the stop loss order? Will the order trigger at best price?

2. What happens if price jumps above profit target order ? Will the order trigger at best price?

I am assuming the answer is yes for both questions. Of course i will be testing this for every trade before going live.

Thank you

[NinjaTrader_AlanP]

Hello simple_goodoboy,

In the case where you are long and the market gaps below the sell stop market price, your sell stop market order would be filled at the best bid, which could be much lower than your stop price. The exception I can think of would be if the market opened locked limit down.

In regards to your question, “What happens if price jumps above profit target order”, this would only be possible if the market was closed and reopened above this price, at which point your order would be filled at the best bid upon reopen. In this case, better than your profit target.

Please let us know if you need further assistance.