Stop losses on auto-trade

[Marc108]

Does auto-trade set stop losses or just fire off a market sell when the stop loss price is hit?

Thanks

[admin]

At this time, a stop loss is not entered with the exchange.

Instead, the systems sends a market sell once the stop loss has been exceeded. This all occurs within the model itself.

Thanks for the question.

[Marc108]

Is there a reason for this? Is seems like a huge candle could nuke an entire account with bad slippage?

[Justin]

There are pros and cons of each approach.

Having it as part of the model and our execution system ensures Auto Trade stays in sync. It also ensures the math and optimizations are all within our control. I mention this because there are times where the market may very briefly dip below a stop point, then reverse. Based on the timing of our system, it may not trigger. There are also times the market may go further below the point. All of this data feeds into our system and moves the stop point up and down accordingly. If the stop exists out of our system, the “learning” phase wouldn’t be able to account for it as precisely.

A huge candle can also blow through an exchange stop loss. When the market is moving down quickly, you often get execution below your exchange stop.

But to your point, absolutely, with our system you have the potential for slippage on top of this. We have not seen this be a significant issue yet.

We are continuing to explore this topic though. And I definitely appreciate the discussion–it helps question our approach.

[Author]

Posts