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Adding Stop Entry Orders

Video Transcript

In this video, we want to demonstrate how to place a Stop Entry Order. In other words, how to enter the market using a Stop Order. A Stop Order, simply put is an order that specifies a trigger price. Once the market touches that price, the Stop Order immediately becomes a Market Order, and is filled at the current market bid, or ask.

We can use a Buy Stop Order to enter the market or a Sell Stop Order to exit the market. Of course, if we're trading with a Margin Account, we can use a Sell Stop Order to enter the market with a short position, but we'll cover these advanced trading techniques in other videos.

Let's take a look at this chart. The first we'll notice is that we're using the Stochastics Indicator down here in the Indicator window. We're receiving a Buy signal on McDonald's. McDonald's has been in a nice free fall during the last month. We want to possibly take advantage of a rebound of this stock price. The market may continue to drop down, so we don't want to just enter with a Market Order, we want to make sure that the market actually does turn around, and start to rally before we enter.

This would be a good place to use a Stop Order. The best way to place a Stop Order within Track 'n Trade Stocks, is to come up here to the right hand corner, you'll see this BS button. BS stands for Buy and Sell. We're going to click that, you'll notice when you click that, it loads the cursor with a cross-hair. If we hold the left mouse button down, it drops the order on the screen, and we can move that order up and down, and use this little rubber band effect to line our order up with historical areas of support and resistance.

I'm going to use this to drop an order right above the price bar that the arrow is pointing at. I'm going to place my stop order right there. I'm going to release the mouse button, and it prefills here in the second tab the order placement dialogue box. We're going to come in here, and you see it's going to say Buy Quantity 100. We can change that quantity, of course, to any quantity we want. You'll notice that because we dropped the stop order it prefilled this drop down window to a Stop, and it automatically prefilled the rate at the rate we dropped the order.

Now, we're going to come in and we're going to hit Confirm. We just confirmed this order, and we can slide our Accounting Package up, just a little bit. We're going to put that up there, and we can see the activity of our order in the Accounting Package. Now, as we move this market forward- I'm going to step the market forward one day, you'll notice that the market dropped. So, our order did not fill. The reason the order did not fill, was because the market has to actually touch the price specified, which was 91.11 before that Stop Order is filled.

We have a choice here, we can either leave the order where it's at, or we can drag it to a new location. We might want to pull it in just above the next price bar. This is a trigger price, we can just lower it down to the next price bar. I'm just going to put it just above that price bar. Now, as the market moves forward, let's step it forward one more time. You can see the market rallied, popped up through our price level, touched the price level of the order was filled, and we are now filled. You can see down here in the Accounting under our Account Activity that the order has been filled.

If we go to Open Orders, you can see it listed here that we have a number of shares of McDonald's. We have used a Stop Order to get into the market.

That's how we use a Stop Entry Order within Track 'n Trade.

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