question on SLM

[Cowboy]

Im confused about the choice of adding a protective stop and also adding a take profit sell.

say I enter a trade short at 1880 and I want to put a protective stop 10 points higher at 1890 - if the stock rises that high I want to cut my losses. I understand that a Stop Limit SLM may not trigger. Im not sure what to use to place a protective stop that would trigger if the instrument rises to 1890.

Also I would like to have a take profit sell in place if the instrument does go short 10 points and drops to 1870. Again, Im not sure what to use to ensure the order gets filled at that price or better.

A followup to this take profit question is that I cannot get to 10 points lower on the DOM.

[NinjaTrader_Kyle]

Hello,

Thank you for your post.

1.) A Stop Limit or Stop Market order would be your only choices here.

2.) A standard limit order could be used in this instance.

3.) Please right click in the SuperDOM and un-check the Auto Center feature. After disabling this feature you can use the mouse's scroll wheel to scroll to any price. Clicking the 'C' button will center the last traded price in the SuperDOM if you want to quickly snap back to the current price.

[Cowboy]

Hello,

Thank you for your post.

1.) A Stop Limit or Stop Market order would be your only choices here.

2.) A standard limit order could be used in this instance.

Thanks Kyle
Can you explain or show me a link to understand the difference between Stop Limit and Stop Market — does the Stop Market get filled always and the Stop Limit not always get filled?

[NinjaTrader_Kyle]

Hello,

Please see the following links to Investopedia for an overview of the two different order types:

• http://www.investopedia.com/terms/s/stop-limitorder.asp
• http://www.investopedia.com/terms/s/stoporder.asp

In addition to this content I would also recommend contacting your broker for more information about how they typically process the two order types.

[Cowboy]

thanks Kyle,
To be clear if I am in a short trade and I place a limit order 10 points lower to take proft if the instrument drops there, I place the LMT on the buy side, right?
(as I do with the stop loss on the buy side)

[NinjaTrader_Kyle]

Hello,

Yes, that is correct - when exiting from the short position you would be using a buy order.

[Cowboy]

it seems from the definitions the Stop Limit order is safer than a Stop Order but both may not get filled if the stock gaps - if this is true how do you feel safe having a stop in place?
if there is a gap you could lose everything- or am I misunderstanding something still?
thanks Kyle

[NinjaTrader_Kyle]

Hello,

I'm not really able to address these questions. I would recommend that you speak with your broker for guidance regarding what types of orders to us.