What is a simulated stop?

[timmbbo]

Regarding https://ninjatrader.com/support/help...etstoploss.htm

Of the isSimulatedStop parameter, it will "If true, will simulate the stop order and submit as market once triggered"

Well, what exactly is a "simulated stop"? How is this different than a non-simulated stop? I get the impression a "simulated stop" is just vapor, and does nothing. In what sort of situation would you want to use a simulated stop?

Thanks,

[bltdavid]

A 'real' stop order is submitted to your broker, who usually
sends it to the exchange (though prop firms don't always
do that). A real-money live brokerage account means your
stop orders are sent to the exchange, where they become
resting orders, waiting to be filled or cancelled.

As with most software, a 'real' stop order means the order
is a real working order, typically held at the exchange.

In contrast ...
A 'simulated' stop order is something invented by NinjaTrader,
whereby the stop order's price is monitored, and when that
price is reached, only then does the NinjaTrader software
actually submit the real order to your broker (who naturally
sends to the exchange) where it should be filled almost
immediately (because, hey, the stop price was just hit).

As stated in that help page, a simulated stop order means
the stop order is locally simulated in the software and then
submitted to the market once price triggers the order.

-=o=-

A 'simulated stop order' has nothing to do with a 'simulated
account', these are two entirely different concepts.

Remember, technically, a Stop order is a type of order that
could be a buy or sell order, as well as an entry or exit order.

However, the 'simulated stop order' in the NinjaTrader software
is always an exit order (which typically is known as a protective
'stop loss' order) so that's why you'll also see this NinjaTrader
specific feature also referred to as a 'simulated stop loss'.

Make sense?

[bltdavid]

In what sort of situation would you want to use a simulated stop?

Well, if you're dealing with large number of contracts (esp relative
to the volume of resting orders waiting above and below your entry)
it's a way to 'hide' your large stop order waiting to be filled.

That is, if this is a 'tight' stop order, close to your entry price,
you might like to hide your exit from the market until that price
is actually reached.

[timmbbo]

Thanks David. I don't think my wee little order is enough to move the market, so False it will be.

[NinjaTrader_BrandonH]

Hello timmbbo,

Thanks for your notes.

bltdavid has provided some excellent information on what a simulated stop is and how it works.

More information about simulated stops could be found on the help guide documentation linked below.

Simulated Stop Orders: https://ninjatrader.com/support/help...top_orders.htm