Stop and Reverse - futures trading

Go Back

> Trading Wiki > Terms (Glossary)

Stop and Reverse

A stop and reverse (often known as SAR) is a type of stop loss order that exits the current trade, and either simultaneously or immediately afterwards, enters a new trade in the opposite direction. Stop and reverse orders combine elements of trade management and risk management, and are used in place of regular stop loss orders.

Stop and reverse orders are used when a trader wants to reverse their position (hence the name stop and reverse).

For example, if a trader is in a long trade, and wants to exit the long trade and enter a short trade at the same price (but you will lose the bid/ask spread), they would use a stop and reverse order. The same task could be accomplished manually (i.e. placing an exit order, followed by an entry order), but stop and reverse orders are more efficient as they can combine the entry and exit into a single order.

Also known/called Reversing, Reverse, Reversed.

Many trading platforms have a trading button/icon that achieve this with one mouse click.

Linked to Revenge Trading in that many traders will reverse a trade in revenge when the current trade's direction is not working in an attempt to 'make the loss back' by trading in the other direction.

[with edits]

Created by  steve2222 , February 12th, 2016 at 08:33 AM
0 Comments, 633 Views
Page Tools
Search this Page

Posting Rules
You may not create new articles
You may not edit articles
You may not protect articles

You may not post comments
You may not post attachments
You may not edit your comments

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

All times are GMT -4. The time now is 08:00 PM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

Page generated 2016-10-21 in 0.08 seconds with 19 queries on phoenix via your IP