Fidelity: Will Preset Stop Loss be Triggered Pre- or After Market?

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Introduction ‍to Forex⁢ Stop Loss​ Orders

For seasoned ‌investors and new forex traders alike, learning ⁣the ‌intricacies of‌ the market ⁢is a paramount factor ⁣in order ​to⁤ ensure success. One ​of the key tools used to ⁢potentially protect ‌against ​a negative ‌movement in ‌the‍ market is the stop ‌loss order. ⁤Through ​the use of this order type, forex traders can have‍ a predetermined exit point, allowing them to limit‍ their losses. ⁤In‍ this article, we ‌will explore the fundamental characteristics of these orders ‍and how to use them‌ during trading periods such⁢ as extended hours⁣ and after hours.

What is‍ a Stop Loss‌ Order?

A stop loss​ order is ⁤an ‌instruction given ⁢to the forex broker in order to⁤ close a deal at ‍a ​certain pre-appointed ⁢rate. Typically these orders are used when a trader enters a ⁢position that they believe has ​good potential for short or long term gains, but want ​to establish an exit‍ price‌ before they are potentially affected by a⁤ negative market ​situation.

In⁣ essence, a stop loss​ order ​acts as ⁢a safety net for traders, allowing them to limit their losses‌ and cut out speculative‌ aspects of⁢ their trading activities. There are two ​types of this order​ placed upon the market, ​and understanding the ⁤differences between ⁢them can help forex ‍traders better‍ utilize the tools in their trading arsenal.

What is ⁣the Difference Between Stop ⁣Loss and Stop Limit Orders?

Stop loss orders and stop limit orders both allow traders to ⁣set ‍parameters and conditions ⁤in which ⁣trigger the dissolution ‍of a deal or close ⁢at current market rates. The⁣ difference between ‌these two ‌orders lies in the parameters;⁣ stop loss orders will ⁣activate when the ​market​ rate ⁤is breached, while stop limit orders require a⁣ certain price to be reached before they are ‌triggered.

Stop loss orders ⁤are designed‍ to⁣ protect ⁣against a catastrophic market⁤ movement ⁤that ⁢could put entire trades at risk and cause large ‍losses on investments. As such, these orders ⁣activate once ​the predetermined rate is breached, meaning that if the rate drops suddenly ‍and rapidly, the stop loss order‍ will be ⁣triggered and the ⁣trader⁢ will be​ able to limit their losses. ‌This is⁤ especially‌ beneficial in the forex market,⁢ where ​volatility ⁣is more of a factor than⁣ in⁣ other markets.

Stop limit ⁣orders, on ​the other‍ hand, are a bit more⁢ sophisticated.‌ Rather than ⁢activating once a certain rate is breached, these orders ‌wait ⁤until ‌a certain⁤ rate or price is reached before they are triggered. This allows⁣ traders to take advantage of⁤ market⁣ conditions‍ and potentially reap higher gains, which is ‌a very useful tool in an ever changing market. ​Moreover, stop limit‍ orders can also‍ help traders avoid entering a sell position too soon, thus preventing them from missing​ out on potential ​returns. ‌

Using Stop​ Loss Orders‍ During After Hours Trading

The⁤ ability to use‌ stop loss​ orders ⁤when⁢ trading during extended hours or⁢ after ‌hours has been increasingly popular over the last few years.⁤ While this adds‍ some protection‌ to trades, it is ⁢not ⁤foolproof and should not ​be viewed as⁣ a complete defense against market movements. ⁤

When trading during extended hours,‍ traders ​need to ensure ⁣that they are⁢ aware of the mechanics of when stop loss⁤ orders ‍activate. Depending ‍on the broker and⁣ the type of‍ order, the placement of the order to⁣ begin with⁣ may⁣ be something that needs to be taken into‍ account.⁣ For example, some brokers may⁤ require that⁢ stop ⁤loss orders be placed⁣ before after hours‍ trading begins, while others ‌may allow them ⁢to be⁤ placed‌ while markets are in ​extended periods⁣ of ‍trading.

Furthermore, traders should also be aware that⁤ the amount of‍ leverage ‍one has when trading during‌ extended hours ⁣may differ from⁣ normal trading.⁢ This means that the amount of protection offered⁢ by ‍a stop loss order could be significantly diminished, and should be ⁤taken into account when plotting their stop loss orders.


Stop loss‌ orders are ⁤useful tools ‌for‍ forex traders looking to limit⁢ their losses in the event of a sudden market movement. Depending on the ⁣broker, traders may ​be able to use these orders ​during ‍extended hours or after hours trading, which is a great way to protect against ⁢large losses from sudden movement in the market.⁢ Understanding the differences between stop loss ‍and stop limit orders will help⁢ traders‌ make the most of their ‌trading activities ‌and ⁣put themselves in‍ a⁣ better position to succeed in the long run. , helpful

What is​ the difference​ between pre-market and after-market trading?

Pre-market trading⁣ and after-market⁢ trading are both types of securities ⁣trading. Pre-market ⁢trading⁣ occurs before ​the stock⁢ market opens, while after-market trading​ takes place ​after⁣ it ‍closes.‍ These terms are often used to describe different times of trading activity for stocks,⁤ mutual funds, exchange-traded‍ funds‍ (ETFs), ‌and‌ futures⁢ contracts.‍

Pre-market ⁤trading takes place from 7:00am to⁤ 9:28am EST, while‍ after-market trading usually starts at ​4:00pm⁣ EST ⁤and may last until ⁤8:00pm. This time​ period may‍ be extended ⁣for special events⁤ including corporate earnings releases.⁣ Pre-market trading is limited when compared to the main session, and may be subject​ to special rules or ​regulations.

Will Stop Loss‌ orders⁣ be triggered in after-market or pre-market ⁤review?

Stop loss orders ⁢are typically⁤ triggered in the pre-market review, however ​they can also be triggered in⁤ the‌ after-market review. When ⁣you set ‌a ​stop loss order, your broker will attempt ‌to execute ⁢the trade at the specified price. This‌ does not guarantee that the execution will take place, as​ the market volatility and‌ other‌ factors can cause execution to vary.​

One important⁣ factor to consider is ⁤that ⁣a stop loss order ⁤will limit profits if the stock moves in the⁤ opposite direction to ​what you had expected. This​ means that if the stock ‍rises after you’ve set⁢ the stop loss order, then it ⁣will be⁢ triggered at⁣ the given price. ⁢Additionally,⁢ profits may not ‌be realized if⁢ the order has a⁢ wide ⁣bid‍ or ask ⁣spread associated ‌with it.

What are the risks involved in using‌ stop loss orders?

Stop​ loss orders have additional risks that​ may be ⁤compounded in periods‌ of ‍market volatility. For ⁣instance, if a⁤ stock has ​a‍ wide bid/ask spread then the execution of the‍ order at ‍the expected price ​may not a occur. Additionally, some stocks‍ may not⁢ trade ​at all in‌ the pre-market ‍or‌ after-market, so the ⁢order may‍ not ​be filled at all.⁣

Finally, the speed of execution of the order is also a factor to consider. The ⁤order must be⁤ filled before⁤ the price moves beyond the stop loss order’s price,‌ or‍ you ⁤may have to ‌accept ‌a much lower price. This could‍ mean the ⁤difference between a profitable⁢ and a⁣ losing trade.

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