Trade Template - Part 3 - Stop Adjustments

Stop adjustments allow you to configure TAT to make adjustment to the stop prices or type of stop order on your trades throughout the day as certain criteria are met. Typical use cases for adjusting stops would be lowering your stop trigger amounts as your trades reach certain profit criteria during the day.

TAT support a three tier stop adjustment system, where the adjustments are processed sequentially. Once a trade has met the criteria for adjustment 1, then it will be monitored for adjustment 2. After adjustment 2 is hit, then it will monitor for adjust 3 criteria. TAT checks all of your open trades every few seconds throughout the day to see if any of them have met the criteria for having the stop adjusted.

TIP: Stop Adjustments are completely optional. If you want to leave your stops the same all day, just leave all of the settings blank and the Adjustment Trigger set to None.

Adjustment Trigger

Profit Level (%)

The Profit Level trigger will activate the stop adjustment once the trade has reached the percentage of profit you specified in the Trigger textbox. For example, if you specify 25 percent profit trigger and your trade was opened for 1.00, the adjustment will activate when the bid price for your trade reaches 0.75 or less.

Amount

The Amount trigger lets you specify the price of the option when you want the trigger to activate. If you enter .25 here, then the trigger will activate when the bid price of your trade reaches .25.

Profit ($)

The Profit trigger lets you specify the amount of profit you would like to reach before activating the adjustment. This type of adjustment makes sense for higher premium iron fly trades, where you might want to adjust your stop after reaching $1 or $2 profit.

ProfitTarget1, ProfitTarget2, ProfitTarget3

If you are using split profit targets to close your trade in multiple parts, you can configure a stop adjustment to happen at each profit target fill level. For example, set the adjustment to ProfitTarget1 if you want your stop to adjust when your first level profit target order fills. When using these options, the Target textbox can be left blank, since the filling of your profit target order is the trigger.

Adjustment Type

The Adjustment Type and New Stop fields are use to calculate the new stop value that should be used when this adjustment is triggered.

Stop Multiple

Stop Multiple works just like setting the original stop using a multiple. When the adjustment triggers, the stop will be recalculated using the new stop multiple provided. This calculation is still done based on the original premium received for the trade. For example, if your trade was opened for 1.25 and your adjustment set the new stop multiple to 1x, then when the adjustment fires, the stop would be set to 2.50 (1.25 x 1x plus the 1.25 premium). 

TIP: To set your stop to breakeven, use the Stop Multiple option and set the new stop to 0. This will adjust the stop to match the original entry price of the trade. (1.25 x 0x = 0 plus the 1.25 premium)

Fixed Amount

Use Fixed Amount if you always want to adjust your stop to a specific value, like 1.00 or 0.50. When the adjustment fires, the stop will be changed to the exact amount you provided.

Offset (optional)

The offset can be used to further adjust the price calculated by the stop multiple if desired.

For Trailing stop orders, the Offset is used to set the amount away from the current price that the stop should be maintained. This is a required field for trailing stops. 

Change Stop Type (optional)

This allows the stop of stop order to be changed during the stop adjustment. This can be used to change from Stop Market to Trailing Stop, for example. This can also be used to add a stop order to a trade that started with None.  With trailing stops you only need to provide the Offset value that will be used as the distance for the trailing stop vs. the live price. The New Stop value isn't used for trailing stops as the stop price will be calculated by TWS based on the offset.

Activation Time (optional)

If you provide an Activation Time, the controls the earliest possible time of day that this adjustment can be made. It does not guarantee the adjustment will be made at exactly that time, if the trigger criteria are not yet met, but provides a minimum time to keep your adjustments from running earlier in the day than you might want

Examples

In this example, when the trade reached 50% profit, the stop will be adjusted to breakeven (0x stop multiple). This adjustment can happen at any time during the trading day.

In this example, when the bid price of the trade reaches 0.10, the stop is moved to 0.40. This adjustment will only execute at 2:00 pm or later.