Stop loss confusion (likely user error)

I will question it but If that is the case then the use of a stop loss is very dangerous in certain situations. All newcomers need to be aware of this. I think it’s safer to not use it at all, as I previously thought if you’ve bought the right stock it shouldn’t need a stop loss in the long term.

1 Like

Someone can correct me if im wrong, but just because there’s trades at 1150~ doesn’t mean that there aren’t offers to buy at much lower prices, and with the low volume, that might have been the highest offer given to Freetrade at that specific time. They’re supposed to find the best price they can, and I believe (need to check) a normal buy/sell would have possibly failed in this case. but the instruction for a stop loss was presumably to sell at the next available price regardless.

You can check the execution policy. And as mentioned, ask them for details, I cant imagine this isn’t something they’d want to further investigate just to make sure they are getting the best prices.

So basically, a stop loss only really works on a stock/etf with high liquidity?

the stop loss is more “effective” in a stock/etf which has tighter bid/ask spread and less volatile.

2 Likes

What you want is a stop limit order. Once the stop level is reached then a limit order is created. Usually this is set a few pennies away from the stop level to allow for bid offer spreads. A stop (market) order is a potential recipe for disaster if hit during illiquid times or with an illiquid stock, as you have unfortunately found out.

I have traded for a long time but have never used a stop market order, only stop limits.

3 Likes

Can you set up a Stop Limit on FT+?

Thanks. Does that mean setting up both a stop loss and a buy limit order(at a slightly lower price than the stop loss) on Freetrade to work against each other?

No, I don’t think so. Would setting up both a stop loss and buy limit order(at a slightly lower price) work?

No. Good time to create a topic for it. Many larger brokers offer it.

1 Like

Erm, I’m not sure that would work. I think Freetrade would need to design a Stop Limit order type.

I worry for Plus if this isn’t available at launch

1 Like
5 Likes

I don’t know as I only use FT for an ISA.

In my other brokerage account you designate the order as a a stop limit type. You cannot break them up as one triggers the other.

Otherwise use an alert and when triggered manually set a limit order so you can avoid being run over by the MM’s

A stop-limit would have helped in this scenario, but it’s not a silver bullet. For example, if the after the 20% drop, it just kept on ticking down. You’d then have a limit order above the actual market price and would lose even more.

Stop losses are not guaranteed. The only place I’ve seen that is with spread betting and then it’s not available on everything. In particular, it’s unavailable for the most risky shares!

I feel your pain @DCL9 , this happened to me (more than once) when I first started investing.

I’ve seen people asking about being able to trade out of hours. This sort of thing would be even more common outside of normal hours.

2 Likes

An Australian broker I use has two types of conditional sells: stop loss and take profit.

Each has three sub types: at market, set limit, and trailing.

Freetrade’s stpp loss is the ‘at market’ sub type where they place a normal market sell order triggered by a trade at or below the price you set.

It would be good if Freetrade added the other two.

Set price is what is being discussed. Its triggered the same way, but you also set the lower limit price to sell at. This has the risk @Anders mentioned of not actually making a trade.

Trailing is powerful. Its like an ‘at market’, but you set an amount you want to trail by and it adjusts your trigger as the proce moves up. For example, you might say £2.50 trail amount on a £10 share. Initially, your stop loss would trigger at £7.50, but if the share price went up, say to £11, your trigger moves up to £8.50 accordingly.

You could combine these into some even more powerful options. Hopefully FT are thinking of offering a bit more control.

16 Likes
1 Like

Can I check my understanding please. I’ve been having issues with ft and accused of just moaning so I started looking to go elsewhere. I buy at an agreed price and execute then they do somthing entirely different. I was told to use stops on everything buy and sell and was made to look a prat. Then they took my post down. Is this still happening please? I bought for 96 and the order went thru at 112 or somthing like that. So when I hit the buy or sell I’m not actually getting what I’ve agreed to…

This would have saved me from loosing profit!! Wish they would hurry up and sort it… Glad to know I’m not mad as I complained about this issue and was made out to just be a moaner

You never pre-agree a price. The prices on Freetrade are indicative (the information on the time of the last price is in each stock page), when you place a buy or sell order Freetrade retrieve quotes and take execute the order on the best one.

This is how a lot of brokers work, there’s a few other options though. For example HL will give you a 15 second quote that you can accept or decline. This is an agreement you can accept or decline. Note though that the prices including live prices on HL are also indicative until you place a buy or sell and get a quote to accept or decline.

Other platforms like 212 also use indicative prices, the price on the stock is not necessarily the current live price, and indeed they’ve had stocks with price info weeks out of date.

As mentioned limit orders etc will allow you to make trades at the specific prices you are looking for.
Hope that helps

8 Likes

A triggered order is an agreed price! Then when I trigger an order it misses placing it and I have to buy in at a higher price. I know the price is indiciitive in use ig for live prices and will look to move my trading to them as you just don’t get what you ask for with ft

Claire, Freetrade is a broker not a retailer. No broker can guarantee that they will get a specific price because the broker is not the entity selling the stock to you. They go out and find a seller on your behalf; the seller also wants to get the best price for themselves.

With a triggered order you trigger the broker to go out and get the best price that they can when the indicative price reaches the target that you set. It does not guarantee that you will get the price that you want.

7 Likes