price on y-axis

[jjanguda]

Hi,

I'm new to trading world
and still trying to figure out the difference between STOP and Limit Order.


Let's say the current price on ES is
Ask 2116.25
Bid 2116

And I want to place a sell pending order
at 2115.50 which is my desire entry.
But I want it to be triggered when ask price
hit 2115.50 not bid price. It's like SELL ASK.

I see SELL STOP and SELL STOP LIMIT option.

First of all, can you explain their difference in this context?

In order to get the entry price triggered at ASK price(2115.50),
which one should I use? or either one?



Other question
When I place a sell stop limit order, why is it showing
up down arrow(adjust contact size), check and X symbol
instead of placing simultaneously like Sell Stop?
I don't see this with Sell Stop order.
Can you explain this as well?

Thank you.

[NinjaTrader_EricB]

Hello jjanguda,

Thank you for your post,

To clarify, Sell orders are executed at the bid price, Buy orders are executed at the ask price.

In order to get the order to execute at the Ask price, you would need to submit a Buy order; Limit orders will only fill at your desired price, so you would want to place a Buy Limit at your desired price.

Please see the below link for an explanation of how the different orders function.

https://www.ninjatraderbrokerage.com...er_limit_order

Regarding the other question, I believe what you're seeing is actually the Stop Limit Offset when you're placing the Stop Limit, not the quantity. Please see the below section of our help guide for more on these.

See "How to submit a stop limit order"

https://ninjatrader.com/support/helpGuides/nt7/?sub.htm

You may also be interested in the Order Entry webinar that goes over these order types, please see the below link for the recorded version.

https://www.youtube.com/watch?v=IZmVktlZ6sg

[jjanguda]

Thanks for your reply.

Let's say that the current ES price is as follow.
ASK - 2100.75
BID - 2100.50

I have 2 computers and would like to place a pending order on both computers.
I put SELL STOP at 2100 on one computer and SELL STOP LIMIT at 2100 on the other computer. (same price but different order type)

Here comes my questions.

1.
Sell orders are executed at the bid price.
When current price of ES moves from 2100.50(bid price) to
2100.25 (ASK) / 2100.00 (BID)

what will happen to orders placed on both computers?
Will they be triggered?
or the price should go through 2100.00 (BID) in order for the pending order to be triggered?
In other words, bid price should be 2099.75?


2.
If ES moves from 2100.50(bid) to 2099.75(bid) due to a gap, news (whatever happens to the market), SELL STOP will be triggered as a market order and I would most likely get filled at 2099.75(bid)?


3. How about SELL STOP Limit order? It will not be triggered until bid price returns to 2100.00 or better?


I would appreciate your explanation in advance.

Thank you.

[NinjaTrader_EricB]

Hello jjanguda,

Thank you for your post,

Trading the same account in the same market from two different locations would result in unexpected behavior; attempting to manage the position for the account would incorporate a number of logistical issues with the order the different orders would be filled, in addition to problems this would create on the brokerage end.

It would also require you to purchase multiple NinjaTrader live licenses, as using the same license in two locations would be a violation of our licensing terms.

[jjanguda]

Thank you for your reply.
I don't think you understood my point here.
I gave you hypothetical scenarios to illustrate my questions making sure that you and I are on the same page. I don't have 2 computers by the way.
I just want to understand how sell stop and sell stop limit pending orders would be executed in this particular situation.

So let me rephrase my question.

This is just a hypothetical example.

Let's say that there are 2 traders and the current ES price is as follow.
ASK - 2100.75
BID - 2100.50

They happen to place a sell pending order at the same price at the same time.

Trader A places a SELL STOP at 2100
Trader B places SELL STOP LIMIT at 2100

(I hope it explains my point well this time.)


Here comes my questions.

1.
Sell orders are executed at the bid price.
When current price of ES moves from 2100.50(bid price) to 2100.25 (ASK) / 2100.00 (BID)

what will happen to orders placed by Trader A and B?
Will they be triggered?
or the price should go through 2100.00 (BID) in order for the pending order to be triggered?
In other words, bid price should hit 2099.75 first ?
or 2100.00 (bid) is good enough to trigger for their orders?


2.
If ES moves from 2100.50(bid) to 2099.75(bid) due to a gap, news (whatever happens to the market), SELL STOP will be triggered as a market order and in a fast liquidated market, it would most likely get filled at 2099.75(bid)?


3. How about SELL STOP Limit order? It will not be triggered until bid price returns to 2100.00 or better?


I would appreciate your explanation in advance.

Thank you.

[NinjaTrader_EricB]

Thank you for your reply,

For Trader A

1. The Sell Stop will fill when the market price reaches 2100 or lower.

2. The stop orders will only fill if the market price reaches their price level, not the bid/ask.

3. This would depend on what was selected for the Stop Limit Offset. The offset controls what the maximum of points from the Stop price you will allow the order to fill at -- If no offset was set, then the order would fill like a regular Limit order, at that designated price only.

For Trader B, how the Sell Stop Limit would function would also depend on what is selected for the offset.

[jjanguda]

Thank you Eric B,

Here comes more questions.

1.
What exactly do you mean by market price?
I thought it is bid price for SELL and ask price for BUY.

2.
Based on my understanding market price is the price that an particular instrument(ES in this case) is trading at the moment. On my chart, I do see only BID/ASK price, not market price. Can you explain difference between market price and bid/ask price?


3.
In order for a pending order to be executed, market price must be reach
the level where the pending order is sitting at. Then, bid/ask price comes in next
and if the pending order is buy, it will be placed at ask price and bid for SELL.
Am I right?


4.
And how can I see the market price?


5.
I didn't know about offset option and what it is for until you mentioned it.
This function is still new to me and I need to make sure I understand it correctly.

Here's an example.
The current price of ES is

1050.75 (ask)
1050.50 (bid)

If I put SELL STOP Limit at 1050.00 with offset of 2, what exactly does this mean?
Can you explain it by comparing SELL STOP at 1050.00 ?

I guess you need market price for the order to be executed...
but since I do have no idea where and how to see market works as of now
I can only provide you with hypothetical bid/ask price level.
So let's just assume that market price has reached 1050.00.


6.
I tried to place SELL STOP Limit with a different number for offset.
For example, I placed 1 contract of SELL STOP Limit with 2 offset at 1050.50
and another one with 0 offset at 1050.00.
On my chart, they both appear as 1 Sell STM.
Just by looking at the chart, how do I know their offset number since they look same?



Thank you.

[NinjaTrader_EricB]

Thank you for your reply,

You're correct, the market price is the current price that a instrument is trading at -- which is comprised of the bid/ask prices, e.g. the prices at which trader are willing to sell or buy the instrument.

The market price is shown on the charts by default using a black price maker -- that is the market price.

I had already advised the Stop Limit Offset in my original reply:

Regarding the other question, I believe what you're seeing is actually the Stop Limit Offset when you're placing the Stop Limit, not the quantity. Please see the below section of our help guide for more on these.

See "How to submit a stop limit order"

https://ninjatrader.com/support/helpGuides/nt7/?sub.htm

Please review the resources I have provided regarding these items. Also, you may consider reaching out to a trading coach or online educational resource for questions on how the market functions.

You can test the scenarios you are curious about using the simulated data feed (File > Connect.

I have provided a link below to our Help Guide that goes over the Simulated Data Feed.

http://ninjatrader.com/support/helpG...connection.htm