I would like to set stops on Straddles or Condors at the levels indicated as “1:1 Stop Loss…” at various points on the Straddle/Condor calculator when used to analyze a possible trade.
Stop losses are not just one of the most elementary trading but thankfully one of the easiest to learn as well, so it may seem that the question should answer itself. After all, there are hours of videos on the topic.
And after watching them, it is my understanding that, yes, setting Stop losses on open positions should not be difficult.
In the Intro-Trailing Stop video at 4:08 mins, for example, Mark Skelton tells us that the ATS does three things, among which is not only the profit taking and trailing stops but one can “also set a stop order to get me out if the trade goes against me by so much…” That’s what I mean by stop loss order: a trigger price set below the market on a long and above a short to close the position at market.
But when I try to follow his example, the order is immediately executed at the current market 50 or 80 pips above Stop trigger price.
I have tried hundreds of these trades using several combinations experimenting with all four of the Trail stop Trigger fields, but the Stop triggers revert to limit orders on activation, executing without any pause to “monitor”.
The only exception is when the trigger price to sell close a long position is placed above the market. Monitoring will then go into effect since the order now behave like a sell-stop market order contingent on the underlying hitting a certain trigger price.
Darrell illustrates the value of these contingent orders in another video series on Stop Trigger window, but they cannot be used for stop loss functions.
Here is a screenshot to show how my imitating Mark’s use of the ATS for stop/loss functions fail to work.
This is a screenshot from Mark’s example as it appears at 7:47 in the Spreads Vs Binaries Trailing Stop video:
And here is my order on the same trade at a different but close price level on the same instrument:
Mark did not actually submit this order, since he moved on to another subject, so we don’t seem the order going into “monitoring” mode, which is a critical sign of success it seeks.
I however did activate mine but, like all the others it reverted to a limit order and sold at market well above the stop loss price.
At a different point in the same video, Mark points out that it is necessary only to populate the Stop trigger & Trailing Trigger offset fields to setup a Stop loss order, but when I try it fails.
Is the market moving too fast, prices too volatile or the spreads outrageous? Have a failed to clear my cache or update the browser or plug ins? Am I “fibbing” or just “too lazy” to close down my computer?
These orders are entered Bangkok time when markets are dozing; I am careful to ensure the Offset is larger that the bid/ask spread. I’ve reinstalled the plug-ins, and my mother taught me its wrong to be lazy or tell lies.
Help desk refuses to answer me, saying its not the sort of question one should be asking them and suggesting I haven’t done my homework.
And elsewhere as well great silence seems to hoover over the subject Stop/losses as people on the forum raise similar questions and wait in vain for answers.
So I throw myself on your collective mercy. A stop loss is to traders what the pull-pin is to a grenade, a safety feature designed to save you from blowing yourself up.
I expect a great piling on, as all you hardcore pros out there leap to the occasion by showing me that the only reason no one ever discusses ATR stop-losses is because the answers are so self-evident only a newbie fool would ever ask.
And I will thank you for it.