Stop Loss

The Stop Loss order is an unconditional market close order on trigger, associated to a specific position.

The stop loss order is called so because it is usually placed the same time an exposure is taken, and at a level in negative, or loss territory. However, a stop loss order may be placed later on an already existing exposure, and the trigger may be at a level where the exposure is at profit, which does not affect the execution process of the order.

The position closure due to a stop loss execution may result either in removing, reducing or increasing an exposure.

Facility Trailing & OCO

The trigger of the stop loss order may be trailed. The trigger price is adjusted once the market price moved from a value equal to the trailing step defined by the trader in a direction coherent with the order side. The price from which the trailing step is tracked is the market price at the time the option for trailing enablement is submitted, and is referred as the base price. The base price is dispatched in the messages log upon submission. The trailing option can only be enabled and defined by edition of an existing order.


Position: The position to which the stop loss order is associated.

Amount: The amount of the order is the position amount by default and cannot be defined by the trader. It is not possible to place a stop loss order on partial position amount.

Trailing step: The value of the trailing step, defined in pips. By default, the value (in PIPS) is the one set up in your Preferences panel. A trailing of 10 PIPS means that if the market price gets 10 pips better than the price at which you placed the order, the stop loss target price will automatically move in the same direction for 10 PIPS.

Price: The market price at which the stop loss order is triggered. The trigger may be choose at the bid, or ask side of the market.

How to add a trailling step to an existing Stop Loss order

Right click on the Stop loss order and choose “Edit stop loss”. On the new window appearing, you can tick “Trailing step”. This option is available for Buy and Sell positions, only for Stop Loss orders. The target price of the Stop loss will move only in one direction.



Execution Process

The execution process of the stop loss order focuses on the probability of execution. The stop loss order aims to close the position it is associated with in any market situation, especially under volatile environment. As a result, the slippage of a stop loss order cannot be defined at the trader level. Once the stop loss is triggered, the market order sent is unconditional and the order is parameterized according to get the highest possible probability of execution at the best price offered by Dukascopy Bank. All else being equal, increasing the probability of execution places a burden on the price of such an execution, therefore, traders must remain aware, in all circumstances, that a stop loss order is like an option. Depending on the underlying market volatility, the probability of execution likely involves a slippage amount. The clients must keep in mind that a stop loss order execution price involves more slippage on average than traditional orders due to the quest for the higher probability of execution.

Assuming that the order validation mode is disabled, a stop loss order to sell, placed with a trigger price equal or above the market bid price at the time the order is sent, and/or a stop loss order to buy placed with a trigger price equal or below the market ask price at the time the order is sent, will be triggered for execution immediately and without prior warning. As soon as the conditions for triggering are satisfied, the orders are sent for execution immediately.

Margin Requirements

The margin requirements for a stop loss order are calculated when the order is triggered and sent for execution. If the order execution cannot be processed for margin reason, the order is rejected and the trader is warned accordingly that the order is rejected for insufficient margin.

Stop loss orders may be prevented to be executed in situations where the result of closing a position would result in an increase of the net exposure, and that the use of leverage is already above 100 %, or that the exposure increase would bring the use of leverage above 100 %. In such instances, the traders must carefully review the position structure, and conduct the appropriate actions. This situation may occur with hedged exposures.
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