In the Configure Brackets options under Break Even Stops, it states as follows in red:
Note: Stop Orders rejected by the exchange will be resubmitted as market orders
However, in live trading, when there have been instances where the Stop Order was rejected to due to high market volatility at the time of trade entry, the Stop Order was not resubmitted as stated above.This is quite troubling as my trade was left naked and were it not for the fact that I checked the computer, I could have sustained a major loss. Has anyone experienced this before or know how this can be fixed?
Hello @newbie, and thank you for your question. It is very hard to guess what happened during the time that you have actually submitted the order, however, and we would need to investigate the specific order you refer to. Please submit details to support@optimusfutures.com
Also, during volatile times if you are a tick trader, you could have placed your stop below the stop in the case of a Buy-Stop or above the market in case of a Sell-Stop. We have seen these rejections before occurring because the market is extremely volatile. We have seen these human errors occur in the past.
Also, we have seen situations that due to gaps, the market actually turned from a Stop Order to a Limit Order. For example: let’s say you are long, and the ES market gaps 50 full points down. In those instances, the market is way below the stops, and your order from a Sell-Stop could turn to a Sell-Limit. In those instances, you may want to exit the markets right away. Again, these are extreme instances, but you should be aware of them.
We typically do not hear of such instances with Rithmic, but we would also invite @Rithmic to make comments on the rules associated with their Bracket Orders.
Thank you,
Matt Z
Optimus Futures
800 771 6748 Local 561 367 8686
There is a substantial risk of loss in futures trading. Past performance is not indicative of futures results. The placement of contingent orders by you or broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.
@newbie, although as @Mod-MattZ pointed out, stops could become limit orders in case of rare severe price gaps or by mistake it could have been placed as the buy/sell Stop on the wrong side of the market or intended position.
But, to your credit, a trader who worries about stops and places importance on risk management is “light years ahead” of their competition and some traders who are in the markets for the rush of winning only and don’t use bracket / stop orders and rely solely on their intuition. Most of the time the stop is your oxygen.
Mechanical stops, although occasionally do require some sort of manual intervention are one of the best long term insurances we have.
I am well aware of the market conditions you have rightly pointed out that can result in the rejection of a Stop Loss order. My problem is with the claim made that in such cases, the Stop Order will be resubmitted as a market order (to guarantee that the open trade is closed being the logic, I believe). Is this claim true or not? This is the all-important question that determines how I will go about managing my trades. I was hoping you could shed some light on this particular claim as it is one of the primary reasons I chose R-Trader Pro to begin with.
You are very welcome. I would not consider anything a claim because there are futures trading software functionalities, and at the same time exchange procedures with orders. As I suggested above, I have invited @Rithmic to come and comment on the implementation of their Bracket orders.
You chose a good software, and it is very fast to execute on. Let’s see what Rithmic says. So far they have been very receptive to customer’s questions on our community site.
Thank you,
Matt Zimberg
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
@newbie,
Very valid point. I would suggest to pull your detailed trades (if live orders were placed), confirmations and
cancel/modify/rejection logs. Then analyze it very closely and break it down by time of order placement and validate it with the market data moves and finally compare with the R-Trader logs. It always pays off to save, copy/paste/extract or screenshot your situation for further analysis.
I would follow @Mod-MattZ ’ suggestion and send the details to support@optimus for further analysis.
Once resolved, I would love to learn what happened as I will also consider using R-Trader soon.
Can anyone verify that this function works? It is a significant question when considering whether or not to use the breakeven stop function. I assume that when not using the BE stop function, the “convert to market on reject” function does works.
Yes, the break-even bracket order function on R Trader & R Trader Pro does work.
Their bracket order configuration window provides traders with the ability to move stop orders to break even based on your trade’s ticks of profit or based on when the last trade price has moved a number of ticks into the profit.
As you mentioned, there is a note that if the stop order is rejected by the exchange when using this function the order will be resubmitted as a market order. You can actually have the “Convert to market at” field enabled along with the breakeven function at the same time, whatever criteria is hit first will trigger the contingent fields you have configured in the bracket configuration screen.
For any user unfamiliar with these features, you can see the configuration screen and the different options available in the image below:
thanks for your response but your explanation is incorrect.
I talked to Rithmic support and was explained that despite the note when using the break even stop: “stop orders rejected by the exchange will be resubmitted as market orders”, this only applies to the updated stop once the break even trigger has occurred and DOES NOT apply to the initial stop. If it is important to the trader to have the “convert to market on reject” functionality (which it should be to anyone concerned with a market blowing through their stop), they should not use the break even stop option.
As far as the “convert to market at” option you mentioned, that is clearly meant to convert the stop to market at a specific time and would not serve the same function as “convert to market on reject”.
As I said above, “convert to market on reject” is a crucial function to anyone seriously concerned with risk management, and in my opinion, makes the break even stop function unusable since it does not work on the initial stop.
@jrh059 Thank you for your response. Can you please use a specific example with price entries and stops to demonstrate how you think this function should work? I’d like to hear your opinion before I explain stops fully.
Thank you,
Matt Z
Optimus Futures
Disclaimer: The placement of contingent orders, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts since market conditions may make it impossible to execute such orders.
This makes sense because the price can drop or rise fast, so it could be rejected by the time the order is delivered. This could happen, in my opinion, when the traders want to move single ticks to B/E.
The problem with this is that if the initial stop (before any updates to BE) is rejected, it will not be converted to market. This means that if you have an initial stop at 20 ticks for example and a trigger to move to BE at +20 ticks, if the market blows through the initial 20 tick stop before any BE trigger is hit, the stop will not be converted to market, leaving the trader with an open position with no stop.
My developers have reported to me that what you report is actually true, if you select Break Even, then if the stop is sent it will be converted to a market order if the exchange rejects a modify. Apparently however if the initial stop as entered is such that it is rejected by the market (i.e. because the stop would immediately trigger (the exchanges never accept a stop which would trigger immediately)) then in this case the break even stop is not converted to market.
I have discussed this with my developers, and they are reviewing whether we can change our software so that even break even stops are modified to market upon reject. I will keep you posted.
That is correct because even the exchange does not guarantee that Stop-Losses will be triggered and executed. Although this is not common daily, we have seen situations where Stops could not be executed. Again, this is not an API, software, or broker issue but an exchange issue.
Every Stop has an exchange limit attached to it, whether you place it or not, and it will differ from commodity to commodity. This means that if the market gapped past that limit, your Stop could be changed to a limit, and as you mentioned, there will be no stop. There are also Price Limits where you may get stuck in a Limit move.
This is why we always recommend watching your screen when you trade.
