MIT orders

“M.i.t.” is the abbreviation of “Market if touched”. StereoTrader deals with synthetic MIT orders, as well as with normal orders. The MIT orders are only managed by StereoTrader and are not sent to the broker’s server.

MIT orders may be used for limit orders, stop orders, take profit and stop loss. For you as a trader this makes no difference in view of handling, but MIT orders are intelligent orders which offer much more functionalities:

  • Spread control – filled only if spread is below a specific value
  • Chaining – takes care that only one order is filled in case of there are multiple orders in a row/grid
  • Pullback control – allows exceedance of limit orders and fills them only after a pullback (see Limit Pullback Order)
  • No limitations in view of distance to the price

Limit Pullback Order (LPO)

The most interesting special order type of StereoTrader is surely the Limit Pullback Order (LPO). This order type is synthetic, managed only by StereoTrader and not sent to the broker’s server (MIT order).

The idea behind is simple. In the case of a buy order, a limit order is always placed below the current price, normally a bit above a specific level, e. g. the low of the current day. The problem normally is, that the order cannot be controlled at all and it may happen, that the price level exceeds the limit that far, that your stop loss is triggered immediately.

The limit pullback order watches the price level every single tick and fills the order only, when a pullback of at least n points to the direction of the order occurs.

Example:

The current level of the Dow is 18020, the limit buy order is placed at 18001. The Dow makes a move straight from 18020 to 17970, and then pulls back to 17990, and the falls again. With a normal limit order, this trade would always be a losing trade with at least -11 points.

Assuming the pullback is defined with 2 points, the Limit Pullback Order would be filled at 17972 and the maximum achievable profit would be +18 points.

The following graphs compare the LPO to normal limit orders. In both cases, the same strategy and settings are used. Left side with the Limit Pullback Order, right side without. As one can see, the LPO smoothes the equity curve because in most cases, it is able to lower the drawdowns and/or to increase the profits.

Limit Pullback Order:

StereoTrader_LimitPullbackOrder_3
Equity curve when using the Limit Pullback order

Standard limit order:

StereoTrader_LimitPullbackOrderOff_1
Equity curve using normal limit orders

Market Trail Order (MPO)

Instead of using normal market orders to open a position, StereoTrader offers Market Trail orders. Such an MPO places a stop order at a specific distance close to the current price level, whereby this order is trailed with the price and is filled when the price moves into the direction of the order.

Attributes

StereoTrader supports the following attributes for pending orders:

  • OCO – one cancels the other when filled
  • COO – order cancels opposite orders when filled
  • REV – order closes opposite positions when filled, similar to normal reverse functionality, but allows to control the size when a position is reversed
  • NET – order compensates opposite position. This allows execution of partial closings with orders (MIT orders only)

Order trailing

Any order may be trailed by different logics. This makes it possible to get precise automated entries, e. g. below the lowest low of n candles, as well as to define different trailing stops at different levels and sizes to exit a position automated step by step. Integrated trailing types are:

  • Straight – follow the price at a specific distance
  • SMA/EMA – follow a specific moving average
  • PLH n – below the lowest low of the last n periods/candles (in case of a long positioning, short vice versa)
  • Trendline – follow the level of a trend line

The Remote API allows furthermore to define own trailing logics.