4. Trading with Swordfish > Triggered Orders

Introduction

This section explains how to submit a triggered order to the exchange.Watch the video Triggered Orders.

A triggered order is simply an ordinary order that is not immediately submitted to the exchange, but is submitted ONLY WHEN ITS TRIGGER CONDITION HAS BEEN MET. Once the triggered order's trigger condition has been met, the order will be submitted to the exchange just like any other order and there is no guarantee that the order will be executed - this depends entirely on the activity in the market at that time.

From the preceding explanation, it is clear that triggered orders can be used in conjunction with a variety of trading strategies, including stop-loss and profit-take. The crux is to determine what type of order you wish to submit (ie buy or sell) and to what level you wish the market to move to before your order should be submitted.

Triggered orders have as their condition the last price traded of the particular instrument.The trigger condition relates to the market direction in order to trigger the order: On and above implies the market must move upwards and achieve or breach the trigger price while On and below implies the market must move downwards and achieve or breach the trigger price.

For example:

BUY 1 SEP14 ALSI @ 24000; TRIGGER PRICE = 24020; TRIGGER CONDITION EQUAL OR BELOW.

If the last price for the SEP14 ALSI moves down to or below 24020, the above order will be submitted to the market as sell of SEP14 ALSI at price 24000.

Method

•	To submit a triggered order to the exchange, proceed exactly as you would to enter a regular order.

•	Click the Trigger checkbox on the window.

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In the Trigger group box , choose whether you want the order to be submitted when the last price of the instrument is equal to or higher than the trigger price or equal to or lower than the trigger price. In the image below, the user has selected to submit a buy (at price 24000) if the instrument last price drops to 24020 or below.

•	Once the order is ready to submit, click on the Submit button to send the order to the exchange.

Note

1.	A user must have trading rights to submit orders.

2.	Triggered orders can only be of type 'normal' (NOR).

3.	Triggered orders are not persistent, that is, if the network-chained server nearest to exchange loses its connection to the exchange, upon reconnection any triggered orders that were pending will be lost.

4.	Bear in mind when submitting orders that you may be subject to restrictions in terms of quantity and or price, such restrictions placed by either the exchange or an intermediary such as a broker.

In order to give a triggered order the best chance of trading, it is important that there is a spread between the trigger price (the condition) and the actual price of the order. For example if the triggered order is being used as a stop-loss and the triggered price is 24020 (as example above) the selling price of the actual order should ideally be less than 24020.

If the selling price is set at 29570, for example, and the market is moving down and a trade occurs at price 29580 (the trigger price) then the triggered order will be inserted into the market. Since there is a 10 point spread, the order will possibly be the best offer in the market at that time and will probably be hit by the current best bid which will likely be higher than 29570. In this way, the user has given his stop loss the best chance of trading and the user is getting the best price available at that time.

A trailing triggered order is the same as a normal triggered order, with the addition of a trailing distance. If the trailing distance is set, the triggered order will always remain within the selected distance from the current last price of the specific contract.

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For example, the trigger condition is On or below trigger price, the trailing distance is 50 points and the last price rises 5 points, BOTH the trigger price AND the order price of the original trailing triggered order will adjust 5 points upwards. The triggered order is effectively trailing the last price.

•	If however in the example above, the last price falls by 5 points, the triggered order will not change at all, as the last price has closed the gap between the last price and the triggered price by 5 points (the gap is now 45 points, within the 50 trail specified).

•	From the above example, it should be apparent how a trailing triggered order can be used as a trailing stop loss, allowing the user to potentially lock in profits.

Note

1.	If the trigger price is set further away from the current last price than the selected trailing distance, then all the trigger prices will be adjusted on the first change in bid or offer on the contract.

2.	For example, the last price is 10 000. The triggered order is entered with order price 9 900, trigger price 9 910, trailing distance 50 points and trigger condition On or below.

3.	The trigger price is 100 points away from the current last price, but the trailing distance is set at 50 points.

4.	On the first change of bid or offer on the contract (assuming last price is still 10 000), the triggered order will be adapted to a trigger price of 9 950 and an order price 9 940.

5.	Although the triggered orders prices have been adapted, the distance between the trigger price and the order price (10 points in this case) has been maintained.