Practical advice for using vol trigger effectivey?

[Hauser]

Today I was short on BAC when my stop was triggered by an order traded well out of range:



I see this sort of thing happening a lot and I'm interested in using ATM's vol trigger to minimize it, but I'm not sure the best way to go about it. I understand it's based on bids rather than actual fills, so does anyone have any advice about a good practical way to set the vol trigger value to prevent these sorts of fills firing my stops? Thanks!

[NinjaTrader_RJ]

Hello,

Thank you for your note.

The volume trigger is a volume floor, not ceiling, therefore I don't beleive it will adress your issue. For example if you enter 100 in the volume trigger, once volume gets BELOW 100, your stop will be sent, not above.

Unfortunately I do not know a way around the large price movements causing the stop to be triggered.

[Hauser]

Serves me right for not reading the manual! How can I make use of this feature then, for example what is the trader hoping will happen in the following example from the manual?

Buy Stop Market Example

Order Type - Buy Stop Market
Stop Price - 1000
Volume Trigger - 500

This example will trigger once the market trades at a price of 1000 and the ask volume is less than 500 contracts. Once triggered, a market order is submitted. If this was a sell order, the bid volume would be monitored.

Does this mean if the market hit 1000 but ask volume was > 500, the stop wouldn't fire? What if the market pushed to 1001 and the ask volume dropped to < 500, would it fire then or only under the conditions of price = 1000 and ask volume at 1000 is < 500? I presume this is to try and catch a bullish breakout, e.g. stop set for a higher price than current price, and with few sellers (low ask volume)?

[NinjaTrader_Jason]

Hello Hauser,

Please see the information at the link below regarding the benefits, but also risks, upon using such orders.

http://www.ninjatrader-support.com/HelpGuideV6/Overview12.html