Why did my stop loss not work

As already mentioned, depends on if it's a limit or a market order. It also depends on the market. For example, if you're trading crude, you need to use market stops instead of limit stops. If you're trading something like ES, you can use limit stops as there is great depth at each price. However, there are certain situations where your stop will most likely get jumped. An example would be doing something daft like putting a trade on 2 mins before a major economic release.

I had a trainiee trader once who didn't listen to me when I said don't put a trader on just before a figure. This was last year.... he put a trade on right before consumer confidence came out, which was much higher than expected. He got completely smoked by the market....

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What can also happen is that your broker's platform malfunctions and stop orders don't execute when triggered. This was the case recently if you happened to trade the September CL contract through Interactive Brokers. ... Not good.

I had a similar incident with IB about a year ago. I daytrade, but put in a stop in case of Internet problems. Stepped away and then came back to my trade to see that I had gone through my stop a few minutes previously but no trade executed. The stock [can't remember now the ticker] had plenty of volume so no issues with getting filled and was a tight spread with both bid and ask below stop price. I gave it a few minutes longer since price began to move up again and I also caught a snapshot of my IB screen that clearly showed the stop order with a current price well below so I could send it to IB. Again, this was not an issue of a poor fill or lack of market participants, just no fill whatsoever. When price began to fall again [slowly since it was not a volatile stock] I manually closed and then contacted IB to recoup some money. I clearly showed them that I could have filled at my stop price since the time and sales screen showed many trades at that level. Now mind you, I was not too concerned with the dollar loss since I was testing a new strategy and was only out 12 bucks, but I was very concerned about what could have occurred with a large order and a reliance on my stop.

IB refused to refund any money. They blamed Lava and showed me their policy which stated that they were not responsible for any of these losses. I fought a little bit but stopped short of filing a complaint with FINRA or the SEC or whoever it was I could file with. Anyone else have any problems with a stop not being filled? Any recourse taken?

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Hi! I'm from London!

Thanks for sharing this information!

It's great!

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In very active markets, where you have large players with automated systems operating, it may be good to have some additional conditions when you put a stop-loss. In these markets stop-losses are almost always triggered by the automated trading systems.

You could try using 'conditional stops' which would check for a valid trigger of the stop price. A condition could be based on say, Relative Volumes.

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I have a server which never loses internet connection. Costs me $150 a month and is up 100% of the time. For me it has saved my butt many many times. Well worth the $150 if you ask me. Also the server is right on the exchange in NY so the ping rate is less than 5ms giving me better fills [so they say] haha. Anyway, you can pm me if you want any of that info.

On the note of the stop order not executed, at least in futures and can still happen even if your stop is with the exchange. Doesn't happen often, but here is what happened to me. I was in Lean Hogs short with a stop of only $200. All of a sudden something happened and there was a huge buy order that went through at market. Well it shot the price up way higher than my stop, the stop market was executed but by the time the stop went to market, it was more than 50 cents higher than where the CBOT set their limits at. Basically the next offer to sell was more than 50 cents higher than the stop so they do not allow the transaction to go through. Hogs went limit up in 1 second and I still had a position on. So basically, even in super fast markets you can get screwed.

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