What do you do when fast price outpaces your stop placement?

General Discussions
1

Before anybody else says it, yes, I’m not experienced enough to trade futures and am going to go back to less risky trading for a while. Also, I got out with trading fees only, phew.

So, I placed a buy order (MES) today at exactly the second that whatever happened happened this afternoon (this morning US) and price had dropped below my auto stop level before the stop was placed.

As price climbed back towards the stop I hit the stop thinking (in a panic) that it would market me out of the position but of course I cancelled it, yes v stupid. All was ok in the end and I got out exactly where I got in but my question is this. When this happens, I understand that if price comes back to your stop (and you don’t freak out and do something stupid) then you’ll just be stopped out, no drama. However, what happens if price does not come back to your stop? You ‘just’ get liquidated, right? Is there anything you can do before that happens? E.g. can you place an order to exit the position? In which case, will your original stop be cancelled when that ‘emergency’ order fills or will you be left with a lonely order just hanging there? Or do you hit ‘flatten everything’? Does that market you out of any position you’re in?

Thanks for any advice.

2

Futures Trading: What It Is, How It Works, Factors, and Pros & Cons: https://www.investopedia.com/terms/f/futures.asp

3

Use bracket orders.
Never use stop limit. Use stop market.
Let me guess, the 10:16am bar today :slight_smile:

4

It’s best that you test it yourself - use market reply or live market with sim account.
Also look into OCO oders and ninjatrader’s Daily Loss Limit feature.

5

Thanks for replying, yes it was then, ugh. I didn’t trade on NT until I’d set up an automated stop market order and tp (limit) to be placed with every trade. I will look into the daily loss limit, thanks for that. But for the time being I’m trading elsewhere for a bit. Until my nerves recover! I know stops can fail, I saw it in crypto on October 10th, it’s part of the risk you take. Combined with futures, though, yikes. It’s one thing to know that futures are powerful but it’s another to see it on the screen for a few minutes from the wrong end of the barrel of that gun! Am too frit for now. Will be back and thanks again.

6

Oh it was you who recommended the daily loss limit - thanks, will do and thanks for the advice. I did trade with a sim account initially. Yes I could go back to doing that. I’ve gone back to trading elsewhere for now in a less scary market. Am reluctant to put the training wheels back on just now. Will if I have to.

7

Very thoughtful, thanks!