Order types available
The PaperTrading module is a trading simulator. Each user understands that it does not in any case allow the creation of real orders. Any order, gain or loss must be considered as virtual. The PaperTrading module is only a decision-making tool. Each user is solely responsible for all their own trading operations and portfolio management.
With the PaperTrading Module you have access to a variety of order types, from simplest to most sophisticated. In this section, each order available in the ProRealTime is described on the basis of common technical analysis knowledge.
At market order
It is an order to buy or sell at the current market price. The execution is almost immediate.
The only condition is the presence of sufficient bid or ask volume, as soon as the security quotes. The price of execution is the best price available on the market.
It is an order to buy or sell at a specific price, or better. A limit order defines a limit below or above which the order should not be executed.
In case of buy order, the limit order is below the last price level. In case of a sell order, the limit order is above the last price. Limit orders can be used to prevent an unsuitable price of execution in case of price gaps.
Example: place a buy limit order with a price of 16€. The order will be executed at the best price available below the 16€ price level, represented by the green shaded area.
It is an order that will be executed if the market reaches a specific price level. If the market trades at that level, the order is triggered as an "At Market" order: it is filled at the best price available, but not necessarily at the stop price defined.
Example: place a stop order with a price of 16€. The order will be triggered only if price reaches the price level, but will be executed in the "shaded area".
A stop order can be considered as the "opposite" of a limit order. Thus, when changing the order type on the order book, the buy and sell icons on the bid / ask columns are inverted.
Market If Touched
It is an order to buy or sell a certain quantity at market price, after the order price is triggered. Hence, the order price and the price of execution can be different.
A sell "Market if touched" order is placed above the current price, while a buy "Market if touched" order is place below the current market price.
STOP with Limit Protection
It is a stop order including the additional protection of a limit order. When the stop order is triggered, a limit order will be placed to prevent a price of execution beyond the Limit price.
Stop with limit protection orders are useful for securities with a high volatility but low volumes.
Example: we have a long position on a volatile stock. Let's enter a sell stop with limit protection order with stop at 16.90€ and limit at 16.85€. If the security price drops below 16.85€, let's say 15€, we retain the position as we assume that the price will shortly go up: our order will not be executed. If we had set a simple stop order, our position would have been closed at 15€, and we'd have a loss of 2€, higher than the acceptable loss initially set.
Trailing Stop (fixed or percentage)
It is a stop order set at a specific distance (fixed or percentage) from the market price (or from the entry price of your position).
In the case of a long position, if the market price rises, the trailing stop level moves up, to keep the distance originally set. If the traded price goes down, the stop stays at the same level. The position is closed if the last price reaches the trailing stop.
A trailing stop allows a trader to set a limit for the maximum loss, without limiting the potential gain.
PaperTrading Module allows you to combine two or more of the single orders explained above. In this section we describe some classic examples of multiple orders, but remember that you can use multiple orders for pyramids or for more complex strategies. In the workstation, these are called "Multiple-Leg orders".
One cancels the other (OCO)
It is an order composed of two separate orders linked together by OR logic association. If one order is executed, the other order is canceled.
Example: assume that we have one position open at 16.95€ and we set a sell limit order at 17.05€. To prevent a potential loss, we also place a sell stop loss at 16.90€. Our position will be closed either by the sell limit (our target) OR by the stop loss (protection). When one of the two is executed, the other is canceled.
One enables the others (OTO)
It is a strategy composed by a main order and one or two subordinate orders. When the main order is completely executed, the subordinated orders are placed. An OTO order is usually composed of a main order that opens a position, a target order and a protection stop.
Example : We create a strategy composed of a primary order at a limit price of 16.85€, a target order at 16.95€ and a protection trailing stop at 16.80€. When the main order is triggered, the two subordinate orders are set and we will just need to let the price evolve until the strategy is executed or canceled.