Order Entry Property: Use stop market for stop loss orders

[higler]

I would like to know the effect of the Order Entry Property: "Use stop market for stop loss orders". What are the "trade effects" if this is set to true/false? Currently, I have this set to True but I don't know what it is doing. Is the stop loss order held on my computer or the Zen-Fire servers? I am using stop loss as part of my ATM strategy and I really want to make sure what affect this setting has on my orders. Thanks.

[NinjaTrader_Ryan]

Hello:
Thank you for your post.

By default, "use stop market for stop loss orders" is set to false. Therefore, your stop loss order when using an ATM strategy is submitted to the exchange as a stop limit order.

If this is set to true, your order will be placed as a stop market order.
Please note that this property can be ignored by the exchange itself. When, placing orders on the Ecbot/Eurex/FX, a stop market order is uses and when placing orders on the Globex, a stop limit is used for your stop loss.

Yes, you are correct, the stop loss and profit target orders reside on the Zenfire server.

Regards,

[higler]

Just a clarification. If I place an order on Globex (ER2 for example) and I have "Use stop market for stop loss orders" set to True, then will Globex ignore this and still use a Stop Limit order or does Globex "pay attention" to this property?

[NinjaTrader_Ryan]

Hi:

Yes, to clarify, when using the Globex exchange (ER2), this property is ignored. The Globex will always treat the stop loss order as a stop limit order.

Enjoy your day,

[higler]

OK. Say I am trading the ER2 on Globex and I enter a long position at X and my Stop Loss is set at X - 2. If the market turns on me and the price is dropping fast and plummeting so that my stop doesn't get filled at X - 2, then I am out to lunch in a plummeting market since the Globex's Stop Limit order would only execute at X - 2 or higher?

[NinjaTrader_Ryan]

Hi Higler:

The Globex only uses stop limit orders and not stop market orders. This is not specific to using NT, but is specific to the exchange.

Since it places a stop limit instead of a stop market, there is the risk that the limit order may not receive a fill.

Unfortunately, this is part of the risk of electronic trading.

[higler]

Thank you for your response. I am clear on this now pertaining to Globex and I realize that this is not a limitation of NT but is a function of Globex. If my previous scenario took place where the limit order was missed then my only protection is to hit the CLOSE button to manually close the trade. Correct?

In this sort of situation, because of this "Stop Limit" feature of Globex, is there a market order that can be held on my computer that can be automatically issued if the limit is missed and the price drops below a specific level?

Also, on Globex, are the trailing stops also Stop Limit orders? I would expect that they are. Thanks for putting up with all these questions.

[NinjaTrader_Ryan]

Hi:
Thank you for your kind reply.

You are correct, if it misses your stop limit, the 'Close' button will flatten your account and will exit you from the trade.

Unfortunately, there is not an to automatically attach a market order that can reside on your pc in case the limit is missed.

Yes, the trailing stops are also stop limit orders.

Regards,