Beginner ATM questions

[phil++]

Hi,

I understand the basics of the bracketed OCO orders that form the foundation of any ATM stragegy,
but I have some straightforward beginner questions:

1) Is it implicit that profit targets for breakeven and trailing stop strategies
must be less than or equal to the upper bracket profit target order in order to activate?

For example: ES strategy: stop loss 8 ticks / profit target 12 ticks. Assume a 1 contract (long) position.

Any breakeven or trailing stop strategy must therefore have a profit target <= 12, correct?
What happens if it is exactly 12, i.e. which event triggers, the stop strategy that adjusts
breakeven/trail, or the main upper bracket order that flattens you?

Why does the software allow you enter a profit target outside the main order brackets, if such a target is meaningless w.r.t. your brackets?

2) What happens when both a breakeven and trailing stop strategy have the same profit target?
Which one takes precedence?

Thanks

[NinjaTrader_Kyle]

Hello Phil++,

Thank you for your post.

1.) This is correct.

In the scenario you describe, although both events would trigger, your position would be flattened due to the fact that your profit target has been reached.

NinjaTrader allows you to enter these types of targets in case you decide to edit the order after it is placed.

2.) Are you referring to the profit trigger for these functions, or the profit target of the order?

If you are referring to the profit trigger, both functions will essentially fire simultaneously.

If you are referring to to the profit target of the order, the order will function normally.

[phil++]

I was referring to the profit trigger of the auto breakeven and the auto trail sections of the stop strategy dialog window. If you specify identical profit triggers for both sections (breakeven and trail), yet both sections are set to alter the stop loss differently, I was wondering what happens exactly.

If both rules fire, as you say, then where does that leave your stop loss?

For example:

ATM TARGET 1: Stop Loss 8 / Profit Target 12
-- Stop Strategy --
AUTO BREAKEVEN: Profit Trigger: 6 / Plus: 2
AUTO TRAIL: Profit Trigger: 6 / Stop Loss: 2 / Freq: 2

You go long ES for 1 car at 870.00. NT enters the initial stop loss for 868.00, with profit target sell limit at 873.00. Fine.

Now the market moves up 6 ticks to 871.50. What happens?
The auto breakeven wants to move the stop loss to 870.50, but the auto trail wants to move it to 871.00.

If both rules fire, then which fires first becomes important, correct?

I assume that traders are setting these sections so that there is no "overlap" in the profit triggers so that the rules don't step all over each other?

[NinjaTrader_Kyle]

Hello Phil++,

The Auto-breakeven is the first event to fire (bringing the stop to 870.50), immediately afterward the auto-trail fires (bringing the stop to 871.00).

[phil++]

Thanks!

Using the simulated data feed with the trend slider was quite helpful and it confirms that the breakeven rule does indeed fire first, as you say.

Cheers.