Jump to content

Recommended Posts

Hi folks,

Just wanted to ask traders about a peculiarity of Binance stop limit orders.  I did an experiment where in isolated margin trading (figures changed for simplicity) I put a stop limit order in for 10 coins at a stop price of $1.00 with the limit price 95c.   The price was say $1.05 at the time but drifting downwards.


What happened was that when the price got down there it filled the sell at the stop price not at the limit price.  That’s the best result for me but not what their doco seems to indicate.  They say they put a limit order in at the limit price if the price gets to the stop point.  They actually don’t do that...  they do a market sell instead.

Does anyone know if that is always the case and therefore what is the strategy for these orders?  Do you set stop at price you want or the limit at the price you want?

Link to post
Share on other sites
  • Replies 10
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

The strategy for those orders? I have no idea about that particular exchange's market dynamics / order exec - but I will say that I always thought stop-loss orders were just "painting a target on

Oh, that highlights the advantage of what @NightJanitor said. When you use stops, the exchange can see what you're doing. They have informational advantage. But if you use a bot that monitors the pric

Ah...  that’s excellent thanks.   Yes I’d forgotten that aspect...  that an ordinary limit sell order placed below the current lowest offer on the order book will be sold to your advantage at that hig

The strategy for those orders?

I have no idea about that particular exchange's market dynamics / order exec - but I will say that I always thought stop-loss orders were just "painting a target on oneself."

Good luck programming your panic button to panic in the way that you desire, at a price that you'll be disclosing when you place the order.  (Do you... catch my meaning?)

(I'm expecting, any day now, for people's twitter bios to have a long list of "trigger words" - I expect that most of their replies will then contain those words... Do you see?)

A simple rule of thumb would probably be:  "If you need a stop-loss to sleep well at night, reduce your position or increase your knowledge about the risks of the position."

Link to post
Share on other sites
20 minutes ago, NightJanitor said:

The strategy for those orders?

I have no idea about that particular exchange's market dynamics / order exec - but I will say that I always thought stop-loss orders were just "painting a target on oneself."

Good luck programming your panic button to panic in the way that you desire, at a price that you'll be disclosing when you place the order.  (Do you... catch my meaning?)

(I'm expecting, any day now, for people's twitter bios to have a long list of "trigger words" - I expect that most of their replies will then contain those words... Do you see?)

A simple rule of thumb would probably be:  "If you need a stop-loss to sleep well at night, reduce your position or increase your knowledge about the risks of the position."

I think that might be true in certain places if your bag size is big enough.

 

But mine wouldn’t be big enough to be ‘targeted’.  No one on earth cares where I place my small orders...  so that’s a non-issue for me I think.

 

Link to post
Share on other sites
Posted (edited)
2 hours ago, BillyOckham said:

I think that might be true in certain places if your bag size is big enough.

But mine wouldn’t be big enough to be ‘targeted’.  No one on earth cares where I place my small orders...  so that’s a non-issue for me I think.

I can give a man a fish, I can teach a man to fish - but, apparently, I have yet to master the art of convincing a man not to dress up like one... :)

Edited by NightJanitor
I tried.
Link to post
Share on other sites
8 hours ago, BillyOckham said:

Hi folks,

Just wanted to ask traders about a peculiarity of Binance stop limit orders.  I did an experiment where in isolated margin trading (figures changed for simplicity) I put a stop limit order in for 10 coins at a stop price of $1.00 with the limit price 95c.   The price was say $1.05 at the time but drifting downwards.


What happened was that when the price got down there it filled the sell at the stop price not at the limit price.  That’s the best result for me but not what their doco seems to indicate.  They say they put a limit order in at the limit price if the price gets to the stop point.  They actually don’t do that...  they do a market sell instead.

Does anyone know if that is always the case and therefore what is the strategy for these orders?  Do you set stop at price you want or the limit at the price you want?

I'm not really a trader, but just on the definition of the terms I think that's what always happens. A regular stop order just puts in a market order when the price hits your stop. If, for example, the price is falling quickly, you might sell for less than your stop if the market price is lower by the time your order executes.

A stop limit just places a limit order instead of a market order. When you're selling, a limit order will execute of the price is at or above your limit (you're saying I want to sell for at least this much). In your case, the market price was higher than your limit so it sold at the market price. Buying works in reverse, a limit order is saying you want to buy but pay no more than than this much.

It sounds like what you want is a stop stop order. You want to place a stop at $1.00 that when it's hit places a stop order (sell at market price) for $.95 cents. I have no idea if such a thing exists or if you'd have to use a trading bot to do that.

Link to post
Share on other sites

Oh, that highlights the advantage of what @NightJanitor said. When you use stops, the exchange can see what you're doing. They have informational advantage. But if you use a bot that monitors the price feed and just places your regular orders when you want it, you keep your hand hidden.

I would think that there are simple trading bots out there for a huge platform like Binance. I know you're just a small fish, but millions of small fish together make a huge school that I'm sure looks mighty delicious to a whale.

Then again if your using Binance for leverage, they already know the most important number: your liquidation point. A bot may allow you to create your own customized trading pattern, but in privacy terms, it's not going to help too much when Binance knows what your leverage is.

Link to post
Share on other sites

Not sure if I understand your question. So the $1 in your stop limit order is the activation or stop price as you said. Then you also need a limit sell price which is $0.95.

What happens in a stop limit sell is that once price drops below your activation/stop price, even if it goes back up, your limit sell order of $0.95 is triggered.

So from that point on, if the price is above your limit price, it will sell.

It's not a market order. Think of it this way. If the price is currently $1, and you enter a limit sell order of $0.95, it will execute at $1. But that's still a limit order not market order.

Link to post
Share on other sites
2 hours ago, youngdude said:

Not sure if I understand your question. So the $1 in your stop limit order is the activation or stop price as you said. Then you also need a limit sell price which is $0.95.

What happens in a stop limit sell is that once price drops below your activation/stop price, even if it goes back up, your limit sell order of $0.95 is triggered.

So from that point on, if the price is above your limit price, it will sell.

It's not a market order. Think of it this way. If the price is currently $1, and you enter a limit sell order of $0.95, it will execute at $1. But that's still a limit order not market order.

Ah...  that’s excellent thanks.   Yes I’d forgotten that aspect...  that an ordinary limit sell order placed below the current lowest offer on the order book will be sold to your advantage at that higher price.  That explains it.  Thanks.

And yeah you are correct that is NOT a market order because if it is only partially filled and the price went lower (effectively moving your limit sell up the order book away from the spread) then your limit sell would be stalled and left behind as the market fell away from you.

Thanks for clearing that up for me.

 

Can I ask you, or any traders here, when you place stop losses...   do you place the limit significantly lower than the stop in case of a plummeting market?  Or fairly close?  Or at the same price?  Or higher so you expect wavering around there?

My practice in XRP at least is to be half a cent lower than the stop.  

Link to post
Share on other sites
4 hours ago, BillyOckham said:

Ah...  that’s excellent thanks.   Yes I’d forgotten that aspect...  that an ordinary limit sell order placed below the current lowest offer on the order book will be sold to your advantage at that higher price.  That explains it.  Thanks.

And yeah you are correct that is NOT a market order because if it is only partially filled and the price went lower (effectively moving your limit sell up the order book away from the spread) then your limit sell would be stalled and left behind as the market fell away from you.

Thanks for clearing that up for me.

 

Can I ask you, or any traders here, when you place stop losses...   do you place the limit significantly lower than the stop in case of a plummeting market?  Or fairly close?  Or at the same price?  Or higher so you expect wavering around there?

My practice in XRP at least is to be half a cent lower than the stop.  

 

I'm not a trader but I tend to imagine the more liquid the asset the closer I tend to place the two price points.

Link to post
Share on other sites
45 minutes ago, youngdude said:

 

I'm not a trader but I tend to imagine the more liquid the asset the closer I tend to place the two price points.

Yes exactly so. But you also must allow for the occasional massive drop that happens in crypto even for highly liquid pairs.

On some whale organised stop-hunting expeditions the order book is emptied down towards the silly end in one fell swoop.  A too-high limit sell will be high and dry after that.

Link to post
Share on other sites
1 hour ago, BillyOckham said:

Yes exactly so. But you also must allow for the occasional massive drop that happens in crypto even for highly liquid pairs.

On some whale organised stop-hunting expeditions the order book is emptied down towards the silly end in one fell swoop.  A too-high limit sell will be high and dry after that.

Ya that's entirely possible.

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now


×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.