Guaranteed stop loss

rom1

Trader
Mar 12, 2016
8
2
14
39
Hi,

I was wondering, are guaranteed stop losses only available on spread betting platforms? I'd read a lot about the importance of stop-losses, but also that there is always a risk of slippage.

I'm not quite sure how a guaranteed stop loss could in practise be completely guaranteed, nor how expensive it is, but am foremost interested in knowing if conventional forex platforms offer this service (as I have seen it on some spread betting platforms, but no exclusively forex trading ones).

any insights would be greatly appreciated!
 

Enivid

Administrator
Staff member
Nov 30, 2008
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Odessa
www.earnforex.com
There are two ways a stop-loss order can be guaranteed in Forex trading:
  1. A bucket shop broker. If your broker is not doing anything with your trade but is acting instead as a house in a casino, there is no risk nor any loss for it to execute your SL at a guaranteed level. In case a normal broker is acting as a market maker or just routes the trade through some ECN, it will incur loss if it executes your SL at a better-than-market price.
  2. Insurance policy. I am not sure that any Forex brokers offer such a service, but it is a potentially interesting option for many traders. Traders would pay some fee (depending on the market volatility) to get a guaranteed stop-loss execution. A broker would incur loss from non-market SL prices, but would also be compensated by the insurance fees.
 
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Reactions: 37riched

Ary Barroso

Active Trader
Jul 9, 2017
908
70
39
34
To be honest, I have no intention to use any fixed SL or TP. In my trading, I always set my SL & TP according to the distance on support & resistant levels.
 

Dictorsto

Trader
Dec 23, 2018
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4
24
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I think that it all depends on a broker. This is why it is important to discuss all trading conditions before opening account. SL and TP should be firstly used and then executed always. Slippage can occur during extreme market volatility, but if it occurs too frequently, change your broker
 

J_C_Anderson

Trader
Aug 15, 2018
64
9
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Slippage could occur at any market due to the trading specific. But, at the most of the cases, it would be enough to place usual SL orders, as huge price movements causing slippage are quitte rare.
 

Ulacan

Trader
Feb 21, 2019
91
9
24
Stop loss is quite important in any trade you make to ensure you do not risk losing more than you can afford to lose. That is why if slippage occurs to frequently, change your broker. Slippage is a normal occurance due to trading specific, but too much slippage should make you suspicious
 

37riched

Active Trader
Dec 26, 2018
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24
34
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It is not every day that the market is distablised in a manner that causes huge slippage due to huge price movements. It is therefore enough to just use normal stop loss to control your losses. However, your broker's conditions can also affect the slippage, so ensure you discuss these before signing up with a broker
 

Ann

Active Trader
Mar 4, 2018
68
9
29
29
You can put a little money on the trading account and calculate stopout instead of stop loss. More than what is in the account, they will not take money from you.
 
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Reactions: Enivid

Ary Barroso

Active Trader
Jul 9, 2017
908
70
39
34
Stop loss is quite important in any trade you make to ensure you do not risk losing more than you can afford to lose. That is why if slippage occurs to frequently, change your broker. Slippage is a normal occurance due to trading specific, but too much slippage should make you suspicious

Using stop loss is one of the most impotent points on money management policy. As you know; without proper following MM rule; success is quite impossible here.