Stop Loss/ Take Profit errors

New comment
 
Hi

I was wondering if someone could clarify what happens if a trade moves through a stop loss/take profit level but doesn't have the liquidity to execute the SL/TP

Is this even possible with market orders on fok filling type?

Does the trade then continue on until a further command is sent or will it retry on the next tick? 

Sorry to ask for this but I can't find what I'm looking for through search. 
 

There is no straight answer as this depends on the broker.

With most (if not all) broker stop loss orders are market orders and thus execute always but there may be (negative) slippage. Same goes for brokers that execute take profit as market orders. Some brokers however execute take profit as limit orders. This means if there is no or not enough liquidity the order may not be closed or again depending on broker partially closed.

 
Enrique Dangeroux #:

There is no straight answer as this depends on the broker.

With most (if not all) broker stop loss orders are market orders and thus execute always but there may be (negative) slippage. Same goes for brokers that execute take profit as market orders. Some brokers however execute take profit as limit orders. This means if there is no or not enough liquidity the order may not be closed or again depending on broker partially closed.

Could you share where you see a broker using limit orders to execute a take profit ? I don't think it's correct to say that, but maybe I missed something.

 

Forum on trading, automated trading systems and testing trading strategies

TakeProfit (and StopLoss) of a closed position

fxsaber , 2016.07.17 20:19

Before the TakeProfit hedge was introduced, open positions were stored not on the exchange in the form of limit orders, but on the MT5 trading server. At the same time, at the time of acceptance, they were sent to the exchange not as limit orders at the declared price, but as market orders at the declared price.

This feature is very clearly visible in the tester when TP is triggered: a corresponding market order appears (and not a limit). Since takeprofit is a non-existent exchange type of orders (there are only markets and limit orders), this state of affairs fit into the "market" order.

With the advent of the hedge, the situation has not changed - takeprofits remained virtual. At the same time, the situation is different in MT4: over the many years of existence of MT4 bridges, it has become a standard that MT4-takeprofit are limit orders.

...

It can not be seen. I have never seen a broker stating info like this on their website. 

My real account trading experience with MT4 is very limited but Saber, more real account MT4 experience then me, states the above yellow highlighted.

The working of take profit for any broker can be easily checked given they pass on positive slippage to clients, some don't.

-If there is no negative slippage, most likely it's be means of limit orders.

-If there is a partial close by take profit, for sure it is by means of limit orders.

-If there is negative slippage it is either by means of market orders, a shitty broker or both.

 
Thanks for the info guys. Your time really is appreciated.
New comment