Trading mechanics
Stop order
An order that becomes a market order once a specified price is touched. Used to enter on a breakout or to exit a losing position, it fills at whatever price is available once triggered.
GFN’s figure
A stop order on a GFN account is filled at prices available in the trading environment. Slippage on a stop does not excuse a drawdown breach, so position sizing has to leave room for it.
In detail
Stop order,explained
The distinction from a limit order is the direction of the trigger: a stop is placed where the market is heading, a limit where it is not. That is why a stop can fill worse than its level and a limit cannot.
A stop entry into a fast breakout is the order type most exposed to slippage, because it triggers precisely when the market is moving quickest.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Stop loss
A resting order that closes a losing position at a predetermined level. It is the mechanism that turns a risk-per-trade figure into an actual limit rather than an intention.
Market order
An instruction to trade immediately at the best price available. It prioritises certainty of execution over certainty of price, so it will always fill but not always where expected.
Limit order
An instruction to trade only at a specified price or better. It controls the price but not the fill: if the market never reaches the level, or passes through it too quickly, the order does not execute.
Slippage
The difference between the price requested and the price filled. It appears when the market moves between order and execution, and it is most pronounced around news and at thin points in the session.
Trailing stop
A stop loss that follows the price at a fixed distance as a position moves into profit, and stays put when it moves back. It locks in gains without capping the trade at a target.
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