Stop Limit Order

[koganam]

Hi to all,

I had recently problems with SLM order that never happened to me before.
I placed this SLM order along with my entry order when price still away from my entry; but when price approaching my SLM order, it was not filled, price simply went through it.
I was forced to close the position by market order and lost even more money.

Would anyone please help?

Thank you!

FHTrader

That is the danger in using StopLimit orders: they are only guaranteed to be placed if the market trades through your Stop Price; they are not guaranteed to be filled. As a Limit Order is placed when your Stop is violated, you will be in the market with a Limit Order, which is guaranteed to be filled at your price or better. If the market gaps past your price and never comes back, you will not get filled. (Sometimes the order will not even get placed, especially if the market never actually traded at your Stop price, and gapped over it instead).

Hence the pro's maxim: "Enter with Limit Orders, exit with Market Orders". In other words, you dictate when to get in, and only get in at the price you want, but when you want out, just get out. Of course, that means that if you want to be safe, you should trade only very liquid instruments that have a very small bid/ask spread (preferably one tick); and do not be in the market when it is going to move very fast, as in when a news release is due.