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Is it possible to place a Market Order basis a threshold?

 
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Yadunath

Is it possible to place a Market Order basis a threshold?

Let's say that the current EUR/USD is 1.1385 and Euro has been moving sideways but let's say it may trend down (or up) sooner than later. I don't wish to place a buy order now because even if it moves up to 1.1400 that could be a bull trap only to catch me down from there. In such cases, one may place a potential future buy order say @ 1.1420 and the market order will be triggered only after the threshold is reached. (You could do vice-versa sell order).

In Alveo, I see Limit, Market and Stop order types. Does a stop order do something similar to what's described above? Can someone confirm that please.

Thu, 03/21/2019 - 6:51am
 
ngalobjuan

Yes, a buy-stop order at 1.1420 will do what you described above.

When, say, you place a buy-stop order at 1.1420, it will only trigger at that price if the EUR/USD would indeed go up to that level.

And when it does trigger and the order is filled, it becomes a market order at that previously buy-stop order price.

 
Barrnton

I agree with ngalobjuan in terms of the use of a buy stop order, but note that any stop entry order can result in a trap. The GBP loves to trap traders. In a sideways consolidation there are always orders waiting above and below and all it takes is one spike up and down to clear them out, with price returning to the consolidation area. I know Apiary teaches the use of stop orders to catch quick profits from consolidated price action, but I prefer to forgo the price break and wait for a retrace hold above the consolidation, (Wave 2 of an Elliott wave), with entry at the resumption of price in the breakout direction.

The problem with the stop entry more particularly is that you have to consider the volatility of the pair your trading. Too close and you get spiked, too far and your profit potential decreases.

For full disclosure, I'm a swing trader, not a scalper.

 
FrankS

As the good book and the song says, "there is a time for every purpose." So, with that in mind, let the market action dictate whether you Scalp after a Breakout or Buy-Sell Breakout before. But, yes, if the Stop Entry is above present price then the Buy-stop Order will provide what you want.

And my personal philosophy is this regarding risk: I cannot control risk of the market. All I can do is control my positions relative to the risk that's already inherent. Believing that is easy. It's the application in the heat of trading battle where I find the challenge comes.