Call me suspicious, but I’m starting to think that brokers create an edge by limiting order combination types, while still providing many different order options. For example, here’s the order combo I’d like to use when opening a position:
ENTRY: Combination Stop-Limit order
EXIT: Combination Limit-Trailing Stop
Let’s say the entry STOP triggers when a technical threshold has been breached, such as support. The LIMIT part of the entry order prevents excessive slippage (both organic and that caused by broker hanky-panky). The exit LIMIT is, of course, just a profit target. And the TRAILING STOP fires in case the LIMIT isn’t reached first, thus minimizing damage. Seems like this would be a reasonably popular and obvious order entry combination, doesn’t it? So, why haven’t I found it?
I’m presently trading with two brokers, and neither of them offer this as a position opening combination. TD Ameritrade (using the ThinkOrSwim platform) does not offer a STOP/LIMIT entry at all for Forex. It’s either STOP or LIMIT. I can, however, open with a STOP order and close with a one-cancels-other LIMIT/TRAILING STOP order. Trouble is, there always seems to be considerable slippage at TDA. Hmmm.
At MB Trading, on the other hand, slippage is minimal and spreads are much better. But they don’t offer that combination either. Because of the lack of slippage, I could open positions with a simple STOP order, though they do offer a STOP/LIMIT entry. But it can’t be combined with a LIMIT/TRAILING STOP exit, because that option doesn’t exist. Now, I can place that combination as a stand-alone OCO order, but it can’t be attached to an entry order, so I’d have to be present when the trade is entered. (Interestingly, one option they do offer on the closing end is to add a trailing stop to your profit target, such that once the target has been reached, a trailing stop begins based on that price.)
Overall, I like MB Trading better than other brokers I’ve tried. (TD Ameritrade has the better platform, but, again, the incessant slippage.) But I’d be willing to check out any broker accepting US customers that offers the order entry/exit combination described above. If your broker provides this option, please let me know. Thanks!