Many times my trigger gets hit and stops executed if I am using Stoploss market. Should I use stoploss limit then?
Both have their own pros and cons.
Stoploss limit guarantees price but does not guarantee execution. In case price moves violently through the stoploss limit price, it may not be executed till price comes back to the limit price.
Stoploss market guarantees execution but does not guarantee the price at which it will be executed. In case of violent price movement, losses can be tremendous.
Personally I prefer stoploss limit. In case the stop is hit but stoploss limit order does not get executed, I can always cancel it and place a at the market sell order. Even after violent moves, price does retrace back somewhat.
The trick with Stoploss limit is to have slightly wider gap between stop price and limit price which increases probability of execution.
8 Likes
Prefer stop loss limit orders over market orders.
If you are watching the terminal and if you feel you can handle if the stop loss limit orders not executed completely due to the sudden market movement, then go for stop loss limit orders. Consider liquidity and give enough space between trigger price and limit price.
If you are placing the order in terminal and go out for some other work, then don’t be depend upon stop loss limit orders and use sl-m otherwise you may loose huge.
In safety concerns, better, TSL > SL-M > SL > No stop loss.
3 Likes
I prefer stoploss market order
Stoploss for me is like an insurance policy, you need a cover when shit hits the fan.
It is like the way you don’t need an insurance policy for small dents on your car, but it better be there when you crash the car hard.
Similarly, the thing with stoploss limit is that when that crash happens (market goes against you in a big way, probably 4 to 5 times in a year) your stoploss limit won’t execute and hence not solving the purpose of having a stoploss in the first place.
So personally, only a stoploss market for me.
6 Likes
Hi guys,
Just sharing my experience with SL-Market order.
Had brought tatamotors cash (MIS) at around 394 (1 jan 2016) and set SL-M order at 392. There was bulk buy transaction on NSE of around 1,60,000 shares at around 10 am. My SL-M order got executed at 373. Got the shock of my life when i saw my admin positions window. No sign of the trade on any charts. Fortunately i was trading very small qty at that time, felt like i dodged a bullet. Since then i have been using SL orders only, with a reasonable gap between trigger price and price.
Kind Regards,
Kishen Uchil.