Order opened while disconnected, where my stop loss was on a previous order. Why?

[Moraha]

I will try to explain this the best I can. I am using Topstep and I thought it is an issue with them but they are blaming me so I am reaching out here to see if it could have been an issue with NT. They are saying I must have had an order sitting there, but I can 100% assure that I did not and I never have more than 1 order at one time.

Yesterday, I placed an order with a stop loss and profit target. Shortly after, my internet provider had an issue and it disconnected. I thought no problem, I have my orders set in place so I'll either hit my stop loss or my target while I'm disconnected. I went to a different location and connected to the internet once again and I saw the my profit target filled correctly. However, I also saw that a bit after, the market reversed and it opened a short position where my stop loss was (actually 2 ticks above). Unfortunately, it then reversed again and I hit my max loss for the day. I can't understand what happened here? Please take a look at the images attached.

I want to reiterate that I did not have another order sitting there. There is no reason for there to be an order at that random spot. The picture I took with my phone was what I had on my chart after it disconnected.

[bltdavid]

I'll tell you what I think happened.

First off, here is my summary of the problem:

• You failed to completely understand how NinjaTrader works.
• Loss of internet connectivity meant loss of OCO functionality.
• You did not understand this, therefore, the fault is yours.

Let me explain why this is (probably) true.
I'll be gentle, but I think I'm right.

[But, yes, I could be wrong. You'll have to get this all confirmed
by NT Support.]

You say you're using Topstep.
I presume Topstep is still using Rithmic.
I presume you entered an order using an ATM strategy.

Upon fill of the entry order, NinjaTrader executed the ATM
strategy and submitted a stop loss order and profit target
order, and tied these two orders together via an OCO id.

This is the state of the first pic you posted.

Then your desktop (and NinjaTrader.exe) lost internet connectivity.

Now comes the parts where your understanding failed you.
It is important to understand where these two orders reside.

This page says this about Rithmic,
"Orders in a state Accepted or Working are at the brokerage
or exchange. If the exchange does not support a specific order
type, the order will be active on the Rithmic servers. OCO (One
Cancels Other) functionality is simulated on your local PC."

I will presume you are trading in a Topstep Combine account,
therefore both orders were being held in Rithmic's servers,
if you were trading a live Funded account, both orders would
probably be at the exchange instead.

For Rithmic based accounts, the OCO functionality is still
executed locally by NinjaTrader.exe on your local PC. That
is, when one of the orders fills, your local NT receives the
Filled message, and it knows to send the Cancel for the
other order.

But you say you lost internet connectivity, right?

Well, that means your NinjaTrader.exe on your local desktop
never received a Filled message, and therefore your local NT
never knew to automatically send the Cancel for the other
order.

Later, your profit target target was hit -- fine, you're happy.

-- And here it begins, the start of your really big problem --

What is that problem?
When this profit target order was hit, your stop loss order
was not cancelled -- OCO could not be executed -- because
you had no internet connection, the target order Filled was
never received by your NinjaTrader.exe.

So, your stop loss order remained active and was eventually
executed as a StopMarket Sell order, and looks like you had
2 ticks of slippage on the fill, meaning the Filled price was 2
ticks below the Stop price.

Now, you're in a Short position, with no protective exit orders,
and this position will remain open until you (or Topstep) closes it.

It looks like you failed to take the loss of internet connectivity
seriously (you should have immediately called the Topstep help
desk and closed your open position -- or followed whatever
other steps their service recommends) but instead you felt you
were 'safe' and logged into your account again later and you
wondered why your account was blown.

It's because you were on a Rithmic based server.
It's because Rithmic does not support server side OCO.

Since you didn't understand this, your 'no problem' thinking
was incorrect -- you should have gone into panic/recovery
mode and immediately invoked emergency procedures to
close your position, such as calling their help desk, or using
their phone app (if they have one), etc -- because, even
though your current position was protected (so, you don't
need to panic that bad, but you can't dilly-dally either) the
OCO function will not happen when NinjaTrader.exe is not
running or your internet connection is down, which means
you will enter a second unwanted (and unprotected) position
eventually when price comes back to fill the other order.

So, Topstep's explanation sounds correct to me.

It is not Topstep's fault.
It is not NinjaTrader's fault.
It is the fault of the trader who failed to contact Topstep
to close the position and cancel all outstanding orders.

When using NinjaTrader and day trading futures, with almost
every broker, loss of internet connectivity while you have an
open position should be considered a very big deal.

This is what is called a 'life lesson' -- you should learn from
this experience and vow never to repeat it.

Just my 2˘.

[bltdavid]

They are saying I must have had an order sitting there, but I can 100% assure that I did not and I never have more than 1 order at one time.

They are correct.

Your thinking needs to be more specific.

It looks like your ATM Strategy worked perfectly.

After your one entry order fills, it creates two exit orders.

To wit:
When a position is open, a profit target order is an exit order.
When a position is open, a stop loss order is an exit order.

However:
When your position is flat, a profit target order is an entry order.
When your position is flat, a stop loss order is an entry order.

My point is, you said:
"I never have more than 1 order at one time"

Without saying '1 entry order' or '1 exit order' -- it is ambiguous.
[Sure, like everyone else, I presume you meant '1 entry order'.]

What I mean is,
When you lack specificity, you allow your thinking to get you
into trouble.

You had 2 exit orders, submitted automatically by the Atm Strategy,
so these two exit orders are just as important and viable as the one
entry order you submitted manually.

Topstep is correct, you had two exit orders sitting there.

This is expected behavior when an ATM Strategy executes.

Because OCO failed (due to lack of internet connectivity), when
one exit order was filled, the other order remained and became
a 'sitting order' waiting to be filled -- because you are flat, the
stop loss exit order 'just sitting there' is now an entry order.

An OCO failure is expected behavior for Rithmic orders when
internet connectivity is lost.

You gotta remember that.



PS:
Such is the benefit of 'Server Side OCO' and why almost
everyone wants it -- it solves the 'Client Side OCO' failure
problem when your internet connection is lost, such as what
you just experienced.

PPS:
Fundamentally, your broker only sees two orders, Buy and Sell.
These orders only affect one thing, your Account Position, which
is either Long, Short, or Flat, and is only adjusted due to the simple
arithmetic performed by the Buy and Sell orders.

[NinjaTrader_Manfred]

Hello Moraha,

Thank you very much for your post.

The description posted by bltdavid is, unfortunately, indeed the most likely answer.

As the Rithmic connection does not support native OCO, the NinjaTrader application needs to be connected to this account to cancel one order after the other fills.

If this connection is interrupted, it is possible that both orders can execute, leaving you in an unprotected position.

If you would like us to take a closer look at the log & trace files, or have any further questions, please don't hesitate to let us know!

[Moraha]

They are correct.

Hello Moraha,

Thank you very much for your post.

The description posted by bltdavid is, unfortunately, indeed the most likely answer.

As the Rithmic connection does not support native OCO, the NinjaTrader application needs to be connected to this account to cancel one order after the other fills.

If this connection is interrupted, it is possible that both orders can execute, leaving you in an unprotected position.

If you would like us to take a closer look at the log & trace files, or have any further questions, please don't hesitate to let us know!

Thank you both for your response. I carefully red bltdavid's post and I understand it and makes perfect sense. However, I have to ask....does this differ between how the different futures prop firms have their systems set up? On Bulenox, I purposely put in trades many times and then close my laptop when I go about my day and I never had this problem.

I have noticed however that with Bulenox, I cannot use NT while Rithmic is open. With Topstep, they require Rithmic to be open while I use NT. I'm not sure if this could be the reason I had this issue with Topstep but not Bulenox?

[bltdavid]

On Bulenox, I purposely put in trades many times and then close my laptop when I go about my day and I never had this problem.

Are you trading Toptep and Bulenox from this same laptop?

Is your laptop used as a 'stationary desktop', always plugged in?

What are the settings in Windows when you close your lid?

You need to check those settings, because one option in
those settings is to 'do nothing' -- meaning, when you close
the lid, Windows just keeps running, it does not hibernate or
enter sleep mode.

Is that your case?
With the lid closed, does Windows just keep running?

That could explain the difference you see.

You also gotta remember, it was internet disconnect that
really caused the problem ... perhaps you've never had
that issue with an open position in Bulenox?

-=o=-

Also, internet disconnect needs to overlap with the Fill event.

If you're in the trade for 30 mins while you're waiting for the
profit target to fill, but internet goes down for the first 10
mins of those 30 mins, but then comes back, you won't
see the a problem -- the connection is back and the OCO
should still work fine.

[Although I've seen Apex not reconnecting after a disconnect.
That is, when Apex auto disconnects due to internet issue,
it's server does not seem to auto reconnect when internet
comes back -- never saw this with Leeloo (which, like Bulenox,
is on a standard Rithmic server) remember Apex is paying
for it's own custom private Rithmic server. But I digress.]

Remember for OCO to still work:
The internet only needs to be up at the moment of your
exit order fill so that NT can receive the Filled msg from
your broker and send the Cancel for the other order.

-=o=-

Check your Window settings for when you close the lid on
your laptop -- I bet that's it. You probably have it set to
'do nothing' -- so your laptop never enters sleep mode.

[bltdavid]

I have noticed however that with Bulenox, I cannot use NT while Rithmic is open. With Topstep, they require Rithmic to be open while I use NT. I'm not sure if this could be the reason I had this issue with Topstep but not Bulenox?

That's a matter of using 'plugin' mode when you set up the connection, right?

-=o=-

Probably doesn't matter.

Remember the root cause of your issue?

Internet was down.