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Order Type Sanity Check

Prevents stop-limit misunderstandings in fast markets

Traders often misunderstand that stop orders trigger into market orders, while stop-limit orders can fail to execute during gaps or fast moves. This recipe prompts an order-type check before placing protective orders.

House RecipePersonal5 min setup

INGREDIENTS

🔔Notifications

PROMPT

Create "Order Type Sanity Check". When I place stop/stop-limit orders, remind me: stop triggers market order; stop-limit can fail to execute. If ATR is elevated (>=1.5x baseline), recommend stop-market for exits. If using stop-limit, require a 4-tick buffer.

Pain point

A protective order that doesn't execute can be worse than a bad fill.

Triggers

  • User creates a stop or stop-limit order

Conditions

  • If volatility is high or liquidity is low, prefer stop-market for exits
  • If price control matters more than certainty, stop-limit is allowed with wider limit buffer

Actions

  • Explain the tradeoff: price certainty vs execution certainty
  • For exits: recommend stop-market in fast markets
  • For entries: recommend limit orders during low liquidity

Parameters (defaults)

  • preferStopMarketWhenATRExpands: true
  • stopLimitBufferTicks: 4
  • fastMarketATRMultiplier: 1.5

Examples

  • During a news spike, recommend stop-market (get out) rather than stop-limit (might not fill).
  • If stop-limit is used, require a limit buffer rather than matching stop == limit.
Tags:#trading#order-types#stop-loss#execution