Some EAs use "soft" or "virtual" stops: the stop isn't sent to the broker, but the EA closes the position when price reaches the level. This hides stops from the broker but creates risk if the connection drops.
Soft stops:
- Not visible to the broker.
- Only work while the EA is running and connected.
- If the VPS or terminal fails, the position has no protection.
Server-side stops:
- Stored at the broker.
- Work even if your terminal is off.
- Visible to the broker (which some traders worry about, though evidence of stop hunting is mostly anecdotal).
A combined approach:
- Server-side "catastrophe" stop at a wider level.
- Soft stop at the actual planned level, managed by the EA.
- If connection drops, the catastrophe stop limits damage.
For most scalpers, a simple server-side stop is the safer choice.
Do you use soft stops? Have you had a disconnect while relying on them?
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Server-side stop vs EA soft stop when the connection drops
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FXS London Scalper
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Server-side stop vs EA soft stop when the connection drops
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Shadow Trader
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Re: Server-side stop vs EA soft stop when the connection drops
It is easy to assume a dropped connection leaves everything frozen in place. Not quite, and it is worth asking which pieces live where.
Orders already accepted by the broker's server stay there. A stop loss and take profit attached to a position are held server-side, so they keep working even if the terminal is closed or the internet is down. That is the usual behavior, though it is worth confirming with the broker rather than assuming.
What does not survive is anything that lives in the terminal. Trailing stops run by the platform, EAs, scripts, and alerts all stop when the terminal stops. A trailing stop that seemed to be protecting profit may have been sitting at its last position the whole time.
Then there are the in-between cases. A pending order sent just as the connection broke might have reached the server or might not have. The only way to know is to log in from another device and look.
So does the stop sit on the server, or in the terminal, for each tool in use? That question probably deserves a deliberate test on a demo account.
Has anyone deliberately pulled the cable on a demo account to see what survives, and what surprised you?
Orders already accepted by the broker's server stay there. A stop loss and take profit attached to a position are held server-side, so they keep working even if the terminal is closed or the internet is down. That is the usual behavior, though it is worth confirming with the broker rather than assuming.
What does not survive is anything that lives in the terminal. Trailing stops run by the platform, EAs, scripts, and alerts all stop when the terminal stops. A trailing stop that seemed to be protecting profit may have been sitting at its last position the whole time.
Then there are the in-between cases. A pending order sent just as the connection broke might have reached the server or might not have. The only way to know is to log in from another device and look.
So does the stop sit on the server, or in the terminal, for each tool in use? That question probably deserves a deliberate test on a demo account.
Has anyone deliberately pulled the cable on a demo account to see what survives, and what surprised you?