Minimum stop too high?

• 08/29/2016 at 2:08 AM #12353
  DrSpaceman

  Hi everyone,

  I’m developing some automated trading system through IG Markets (PRT V10.2) and I’ve run into some problems with my stop levels. Basically, when I go to run my systems, I’m told that my stop is too low. However looking on IG’s websites, the minimum stop listed is much lower.

  After clicking “Prepare for Automated trading”, I receive the error “Your trading system could not be added into ProOrder because it uses a stop distance of 4 points. The minimum stop distance for this instrument is 10 points.” (See attached image).

  This is my code for the stop:

  SET STOP pLOSS 4 SET TARGET pPROFIT 11

  1 2	SET STOP pLOSS 4 SET TARGET pPROFIT 11

  I’m attempting to trade USD JPY. Which IG lists here: https://www.ig.com/au/ig-forex/usd-jpy where you can see their Minimum stop distance is 2.

  Indeed, when I attempt to manually trade this pair I am able to set a stop of 2 with no problems, however the automatic system will not let me set this less than 10, which obviously dramatically alters my strategy.

  Is there any way to fix this issue?

  Thanks!

  

  DrSpaceman

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  08/29/2016 at 6:09 AM #12359
  grizzly

  Hi DrSpaceMan,

  Would be best to reach out to IG Client help on this. They often ‘bend’ the rules when it comes to minimum stops & margins for all sorts of events and times.

  With that aside, a 4 pip stop seems extremely narrow, even if you are using 1 minute time frames.

  Cheers

  

  grizzly

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  08/29/2016 at 9:33 AM #12375
  Nicolas

  Hi,

  You can try to use pending stop/limit orders to exit your positions instead of built-in functions.

  Beware that these kind of positions could also be put on market at a different price because of IG spread, so make you tests in any market condition.

  

  Nicolas

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  08/29/2016 at 3:47 PM #12394
  Elsborgtrading

  Hi Spaceman. I also had this discussion today with IG. After observing the DAX SL go from 10 to 6 to 4 in the morning I needed an explanation- as I think you are aware of, you automated code will not work with so widely spread in SL. Also I did observe this Saturday morning from 7:45 to 11:45- the marked should be closed by then. Anyway the conversation was this:

  Me:”Dear IG. I have observed that your SL for your DAX (EUR 1 Mini Contract) keeps changing. 10 early this morning, then 6 later and now it 4 the same day. It is very hard to make a ProOrder automatic trade when you keep changing the SL all the time. So My question is this. What is the minimum SL on this contract Monday-Friday 9:00-17:00 that I can get? I need a constant SL to work the ProOrder otherwise I will get a rejected order and the strategy will not work and then there is really no sense in offering automated trading when you keep changing the rules. So we need to make a deal with this, so SL stays constant”

  IG:”Dear Mr. Elsborg, Thanks for your email. Firstly, we cannot guarantee that the minimum stop level will be constant, it takes into consideration market volatility. So for instance whenever there is important data coming out try and make your minimum stop distance wider.”

  Me:”Regarding the SL. I understand that in certain situation the SL will vary,however from 10 to 6 to 4 in 4 hours is not acceptable- was this due to time of day or the fact you mentioned- it was also saturday where the marked is closed? In given situation like Brexit I was given a notification, Do I get a notification when you change SL again?”

  IG:”The minimum stop distance on the Germany 30 and all our Indices will depend on many factors like the market volatility or any major economic news at the time. Normally if there is a big change in the minimum stop distance we would notify you either via email or you will see a notification of the change on the welcome screen when you log into the platform. We would actively review our minimum stop distances and margin requirement and apply these changes to manage our own risk as well as the risk of our clients. I hope that I have been able to provide you with more clarity regarding the minimum stop distances”

  So I guess I’m am not really getting what I want, which is a constant SL at 4(2 would be even better)- nor do I get information if the SL is changing unless some other countries are leaving EU.

  Cheers Kasper

   

  

  Elsborgtrading

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  08/29/2016 at 8:31 PM #12418
  Derek

  I once ran several systems in demo mode. The orders would only execute when volatility was very low. At all other times the orders were rejected.

   

  

  Derek

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  09/05/2016 at 11:30 PM #12697
  David

  Any belief of a “reliable” constant in the market is a fallacy and will only lead to pain – especially with a market maker.

  Regarding “Stops” is it possible to take the opposite position to close out / net positions. Eg. If you’re 1 Long so you open a 1 Short which will net you to 0?

   

  

  David

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  09/06/2016 at 9:42 PM #12748
  John

  Yes I think so, but the 1 short will be openend at the opening of the next bar and that’s too late I suppose

  

  John

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  09/07/2016 at 8:03 AM #12759
  Nicolas

  Opposite position will automatically close the current one on market. But I can’t understand what you mean by “net to 0” ? Even if you want to flatten your loss, you always have to pay the spread first.

  

  Nicolas

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  09/07/2016 at 12:32 PM #12792
  David

  That’s what I mean Nicolas. Net to 0 = to flatten out. The spread cost will always be there just as the 4 point/pip loss if not more due to the bar needing to close but it is a way to achieve a ~4 pip/stop even though 4 pip stop is not technical available by IG. Having said that such a tight stop would most likely render a strategy to get stopped out too frequently from my experience.

  

  David

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