FuturesBen 

As long as you have your stop loss in place that is where it will get it executed. For your second question, that strategy is common. traders can tell where the stop losses are. Those moves are called a shake out.

FuturesBen that is just not true. If you have a stop loss in the market, yes it will get executed if hit but NO that absolutely does NOT guarantee that you'll get FILLED at that price. Only limit orders fire off at or better than the price specified.

When a stop gets hit it will fill at the next AVAILABLE trade on the other side. It's true on a super liquid product like the eminis there will OFTEN be minimal slippage but not at ALL times and especially not when you really need it because thats when everyone else on your side does as well.

The market quite often vacuums up and down to support and resistance and in those instances the spread CAN get larger than usual.

Sent using the NexusFi mobile app

josh 

Always do your own research -- as a couple of posts higher shows, some people simply haven't a clue (no, stop orders are not in the public order book). Do your own due diligence. The CME has no such thing as a true "buy/sell at any stop price" order. CME's stop order are actually "stop with protection." There is a protection band, and for the ES it is (or was, last time I checked) +/- 3 handles, which is added/subtracted from your stop price. Example: you are long and put a sell stop for 3000. If your order is triggered and market conditions are such that the best available bid to sell into is below 2997, you will have a sell limit sitting in the book at 2997, and will NOT get a fill unless someone takes your offer. Trades can get busted, which means they get cancelled (usually fat fingers) and this is a discretionary decision of the CME's GCC, and no doubt is a messy situation (I have never had a trade busted personally). It is unlikely that a small position will get into margin call territory -- if you are close to this, your position will be liquidated likely long before it is an issue. But as recent negative crude prices have shown, anything can happen. At this point, are you on the hook, or is your FCM? I don't know. You can virtually count this out in happening for a contract like ES, but as they say, anything can happen, and it's the risk you take trading a leveraged product. For stop with protection examples, see: https://www.cmegroup.com/confluence/display/EPICSANDBOX/Order+Types+for+Futures+and+Options More detailed example at the bottom, with order types, showing that a "stop at x" is converted to a "stop limit at x with limit at x +/- band": https://www.cmegroup.com/confluence/display/EPICSANDBOX/iLink+Order+Types See section 588 for busted trades: https://www.cmegroup.com/content/dam/cmegroup/rulebook/CME/I/5/5.pdf If a lightening fast market decline occurs in your hypothetical scenario, yes, you are guaranteed a fill on your buy limit that is 5 points lower. But a lightening fast decline can just as easily feature a spike upward that will trigger your buy stop first. In these scenarios, you will want to use an OCO order. This is either a broker/data feature implemented on their server, or is simulated locally with your software. That is, the CME does not have anything like "OCO" -- but if you submit an order to your broker specifying two orders, with one canceling the other, then your broker will cancel one, when the other is executed. In the cases of crappy brokers, your local software can simulate it. This is more unreliable, obviously. Is it possible for market conditions to be haywire enough that this does not function as expected (your broker, or locally)? You bet it is. What do you do about it? Nothing easy -- you accept this risk when trading. How likely is it that one of these nightmare scenarios affects you? It's unlikely. But anything is possible.

Appreciate you laying this out -- extremely helpful.

josh 

Hopefully one of those lessons you got was: always know what's going on. Late Thursday and all day Friday was leading up to his presser on China (was announced early Friday that it was scheduled at 2pm, wound up being 40 mins late). I won't go into fundamentals vs. other stuff, but be clear -- the market was waiting on Trump, and if you didn't know that, it's like being at the table playing cards; everyone gets 2 cards, you think the game is blackjack, when it's actually hold'em. You simply must know this kind of market driver when it's this obvious. Best of luck to you!

For sure, and I admit I did get a little distracted when the presser didn't go on at the planned time. I'm actually glad this happened, because as I get closer to opening a live account, I'm laying down my 'trading Constitution,' with all my rules on position size, risk management, etc., and Article I will be to never be in a trade when a market mover is giving a speech or an economic report is being dropped. Maybe after a few years of experience I'll try my hand at that, but for the foreseeable future I'll be happy to stay on the sidelines and pick up any crumbs after the market reacts.

Thanks again for the posts -- you've got my back tonight and I appreciate the help from a guy who's clearly mastered his craft.