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Bitten by FOMC


Discussion in Emini and Emicro Index

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Bitten by FOMC

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  #1 (permalink)
Melbourne, FL
 
 
Posts: 9 since Jul 2020
Thanks: 2 given, 1 received

Recently started trading Micro futures: MES (since July).

Had many years experience swing/position trading stock options, but quit back in 2010.

I experienced my first 'anomaly' today, day-trading.

Was trading right around the time the FOMC report was released.

Had entered a long position with ATM in Ninjatrader 8 that auto-entered a trailing stop-market order.

I wanted to replace the stop with a stop-limit order tied to an indicator. Normally, I'll enable OCO, add the second stop, then delete the initial stop.

Just as I was tying the 2nd stop to an indicator, the market dropped from 3400 to 3383, took out my stop-market order AND hit my OCO stop-limit, creating a net-short position

Didn't lose too much, but I'm used to losing due to my own mistakes, rather than bizarre glitches.

So...now I know that OCO cancellations are NOT guaranteed, and I won't chance changing stops like this again.

OCO brackets (with target & stop) I guess are ok as you don't have two orders in the same direction.

Anyone else been bit by this?

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  #2 (permalink)
Albuquerque, NM, USA
 
 
Posts: 59 since Jul 2012
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Yeah, I saw that very long tail print on MES today. I got burned like that once, only with a long wick. Irritating when it happens, but it goes with the territory.

Keep in mind, the CME *automatically* places a stop-limit three points out from your regular stop to protect traders from extreme losses in this type of scenario.

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  #3 (permalink)
Córdoba
 
 
Posts: 25 since Apr 2020
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Hi Ondafringe. Can you elaborate more on the CME automatic stop? First time I hear that and really want to know more about this.
Thanks in advance.
ondafringe View Post
Yeah, I saw that very long tail print on MES today. I got burned like that once, only with a long wick. Irritating when it happens, but it goes with the territory.

Keep in mind, the CME *automatically* places a stop-limit three points out from your regular stop just to protect traders from this type of scenario.

Sent using the futures.io mobile app

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  #4 (permalink)
Albuquerque, NM, USA
 
 
Posts: 59 since Jul 2012
Thanks: 44 given, 55 received

This video explains it best:

https://www.cmegroup.com/education/protection-functionality-for-market-and-stop-orders.html

And here is another explanation:
https://www.danielstrading.com/2013/11/25/why-stops-become-limit-orders-on-cme-globex-ice

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  #5 (permalink)
Córdoba
 
 
Posts: 25 since Apr 2020
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Thank you. Very good video indeed.

Sent using the futures.io mobile app

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  #6 (permalink)
Legendary 4LeafClover
Mumbai, India
 
Experience: Beginner
Platform: Own Customized
Trading: Crude, NIFTY, BANKNIFTY
 
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Thanks for the links.

On thread opening post though, it is indeed something that most of us have been bitten by past.

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  #7 (permalink)
Melbourne, FL
 
 
Posts: 9 since Jul 2020
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ondafringe View Post

Keep in mind, the CME *automatically* places a stop-limit three points out from your regular stop just to protect traders from this type of scenario.


Thanks, did not know that.

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