Order Entry Error – Immediate Actions

 

The plan was simple – a quick scalp short into the next support level about 10 ticks away (or maybe further if the level showed signs of breaking).

But trading does not always go according to plan!

Order Entry Error - Immediate Actions

Order Entry Error - Immediate Actions

Order Entry Error - Immediate Actions

Order entry errors happen. They don't happen often. But I've made them in the past and I'm sure they will occur again sometime in the future.

Most importantly though… do you have a procedure for Immediate Actions in the event of incorrect order entry?

Here are two options you might want to consider for inclusion in your Procedures Manual:

 

Option 1 – Immediate Close

  • Immediately close the position.
  • Confirm flat.
  • Record details of the error for consideration during the post-session review.
  • Consider the need for a break, or a relaxation and recovery session.

 

Option 2 – Assess the Situation

  • Rapidly assess the situation.
    • If analysis indicates potential for the market to move rapidly against the position, EXIT and confirm flat.
    • Else set an aggressive stop to minimise loss and manage the position to try to work a profitable (or breakeven) exit.
  • Record details of the error for consideration during the post-session review.
  • Consider the need for a break, or a relaxation and recovery session.

 

My personal preference is for option 2. If there is a chance to turn the error into a profit, I'll take it. But this option requires that you can conduct quick analysis. And that you are willing to risk a few more ticks loss in the event that your stop is hit.

In today's example I wasn't given the choice at all. The market moved rapidly against me and I was forced to immediately scratch the position.

In future occurrences, perhaps the market will be kind enough to allow me to work a better exit.

Do you have a procedure for Immediate Actions in the event of incorrect order entry?

If not, consider adopting one of the two above procedures.

Happy trading (hopefully always in the correct direction),

Lance Beggs


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YourTradingCoach - Admin

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