What Happens If I Place A Stop Loss Manually?

If you're using the Options Auto Trader and considering manually placing a limit order, it's important to understand how this impacts the system. Follow this step-by-step guide to ensure you don't interfere with the automated trade management.

Step 1: Understand How the Auto Trader Handles Orders

• The Options Auto Trader automatically manages stop loss and take profit rules.

• It does not use limit orders to prevent market manipulation.

• Instead, it watches the market and places orders only when it's time to execute.

Step 2: Know the Risks of Manual Limit Order

• When you manually place a limit order or stop loss order, it remains visible in the market.

• Hedge funds or market makers can exploit this by moving the market to trigger your order prematurely.

• The auto trader avoids this by executing orders dynamically.

Step 3: What Happens If You Place a Manual Limit Order?

• If you enter a manual limit order in your broker, the Options Auto Trader will not be able to manage that trade.

• The system will attempt to place an order but will fail because a working order already exists.

• This means you lose the automation benefits of the auto trader.

Step 4: Why This is Safer Than a Limit Order

Prevents Market Manipulation: Limit orders sit in the market, making them vulnerable to price manipulation. The auto trader places orders only at execution time to prevent premature exits.
Ensures Optimal Trade Execution: The system monitors real-time conditions and executes when the trade meets the defined strategy, rather than being triggered by external forces.
Avoids Trade Management Conflicts: Manual limit orders prevent the auto trader from managing the position correctly, increasing the risk of unintentional exits or errors

Step 5: Recommended Best Practices

Let the auto trader handle stop loss and take profit orders to avoid issues.
If you want to manage a trade manually, close it entirely instead of placing a limit order.
Do not place a working order (limit or stop loss) while the auto trader is managing your trade.

The Options Auto Trader is designed to optimize trade execution and prevent premature exits. Since limit orders can be exploited by market makers, the system waits until execution time to place trades, ensuring better outcomes. To get the best results, allow the auto trader to work without interference or close the trade manually if you prefer full control.

TERMS OF SERVICE: Please be aware that continued use of the Options Auto Trader is subject to our Terms Of Service. If you have any questions or wish to review these terms, feel free to visit the website.