does anyone know of a broker that allows this? i want to do real complex conditional orders sort of like a ladder. for instance, i would start out at a stop loss of 30 pips and a target of a 100 but if the price increases by 30 i would like to reset the stop loss to the price i bought it at, then if the price increases to 60 then reset the stop loss to 20 pips more than i bought it at and then leave the target at a 100 pips. is this possible? i know the trailing stop loss sort of does this but i don't really like the trailing stop loss.

Here is a hypothetical scenario :
You want to profit from momentum activity which is going on and all your indicators are "ON". A nice upward trend is taking place. So you initiate a manual Long order or market order as it is commonly called.

Your objective is to extract the maximum juice from this exceptional opportunity. The first part of the trade is the more risky as price can cooperate or it can decide to go in the opposite direction.

The usual approach is to set an emergency stop loss in your initial market order but at some point, during the course of the trade, you will also want to protect your unrealised profit or at least to move your stop loss at break even. Here is one way to do this...

If you can create limit orders in your platform then you can simulate to some extent an "If condition".

With my broker i can define a fractional lot size such as 0.1 of a standard lot. In the FX market a lot is 100000 units of the base currency in a given pair. In my example, i'll use units instead of a fraction like 0.1 as it will be easier to explain.

I like to work with a fixed quantity of such units. My position size will always be defined as a multiple of such quantity. For example, i could elect to work with multiple of 5000 units. For the purpose of the discussion, let's pretend a lot is equal to 1000 units expressed in a fractional way it would be equal to 0.01 or 1000/100000. It's not the REAL standard lot but it's YOUR lot. With some brokers you have complete liberty with this relative quantity.

If you open a trade with a position size of 3 lots (YOUR lot), your position size is 3000 units of a standard lot.

When you open an initial position, you always use 3 lots (YOUR own definition)...

So, you are Long and the entry price is at 1.5000 with a stop loss defined at 1.4975. But concurrently you create a limit order to enter Short at 1.5050 with 1 lot (YOUR own definition). In other words, if price reaches 1.5050 you'll still have 2 lots left over the Long haul :-)

What have we created with this simple procedure ?

The equivalent of this rule or condition :
If price goes up by 50 pips place my stop loss at break even and let it ride.

Also, if a trailing stop is defined then you can let your computer open is do other occupations.

Hope this help.

i'm truly sorry. i appreciate you taking time to help me but i really don't know what you mean. what broker do you use?

Hey Kyle,

Glad to hear from you.

I know you say here that you don't like the trailing stop loss, but what you have described if it existed would be an advanced version of a trailing stop so this is why I am explaining here from the standpoint of a trailing stop.

While I am not aware of any platforms that will allow you to change the distance that the stop trails by, the FXCM platform does allow you to set two variables for a trailing stop 1 being the distance from the market that you want the stop to trail and the second being the amount you want the market to move by before the stop begins to trail.

For the first part of your oder if I am understanding correctly, you want a stop that is 30 pips from the entry price that moves to breakeven when the market moves up by 30 pips and then a take profit at 100 pips that does not move.

To execute this on the FXCM platform you would set a stop at 30 pips below the market, and your limit at 100 pips above the market. Then in the column that says "stop move", you would set that to 30. This way the stop would not move until the market moved in your favor by 30 pips and then once that happened the stop would move to breakeven and the limit would still be at 100.

Once the stop moves to your breakeven entry price then it is not going to move again until the market moves another 30 pips in your favor (for a total of 60 pips). At that point the stop will move up by another 30 pips so that it is 30 pips behind the current market price and the limit will not move.

So to sum things up here, you can have a stop that moves as you have described but it has to be in equal increments each time. You cannot to my knowledge have a stop that moves to 30 pips behind the market on the first move, and then 20 pips behind the market on the second move. It has to follow the market by the same increment each time it moves.

Hope that helps.

Best Regards,
Dave

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ok, thanks very much. i'll look into this.

Dave

I am quite interested in this as I have been experimenting on the FXCM demo platform and seen many a 80+plus pip move retraced, and conversely many a limit order filled only to see the price momentum carry on - sometimes for 100+ pips.

I am curious then why there is a need to place a limit order when using the trailing stop in the first place.

For example - when I do make the move to live trading the size of account will be intentionally quite small as I want to ensure my demo trading (66% accuracy - broadly 3:1 win/loss ratio) can translate into the real world. So the plan would be to look for good entries either in range bound markets or retracements against strong trends so stop loss can be small (say 25 pips) and then have the stop loss trail at the same margin once the price has moved the initial 25 pips but without limit.

My rationale would be whilst recognising the need for a trade target of at least 2 x risk, I don't believe that has to be a set limit, I would rather assess the likelihood of reaching the target in the first place, and not enter the trade if this was unlikely in for example a narrow range, or where indicators or market sentiment says otherwise.

This way the trailing stop would allow for the more marked momentum or breakout moves in the dominant trend to be captured for as far as they go and do not re-trace to the trailed stop limit.

I would appreciate any thoughts on this.

Regards

Graeme

Hi Graeme,

Most traders that I am familiar with use either a limit or a trailing stop to exit positions but not both so I think this is a fine strategy.

Best Regards,
Dave

__________________
My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.