How to Use Stop Orders to Manage Risk in TFEX Trading
Learn how TFEX Stop Orders trigger, set entry and exit conditions, and review buffer-price examples, execution limits and platform-specific risks.
By Kru Kook (Krittiya Khunabrimas)
How to Use Stop Orders to Manage Risk in TFEX Trading
TFEX is a leveraged and volatile market, so risk control is important. This article explains how the source describes Stop Orders as a way to set conditional trading rules, with examples for opening new positions and setting Stop Loss orders. Check the current order behavior and terms in your own trading platform before using them.
What Is a Stop Order, and Why Use One in TFEX?
The Meaning of a Stop Order
A Stop Order is a conditional order that, according to the source, is sent into the trading system automatically when an underlying asset reaches a price level set in advance. The order waits for its trigger condition; once triggered, it changes into an actual order—such as a Market Order or Limit Order—and is sent to the market for matching.
How It Differs from a Regular Pending Order
A regular Limit Order, such as a buy below the market or a sell above it, is submitted to the system when placed and waits to be matched if the market reaches the specified price. The source says a Stop Order is not sent to the market until price touches or passes its Trigger Price. Once triggered, it becomes an active order. This difference can make Stop Orders useful in fast-changing markets, subject to the platform's exact rules.
Main Benefits of Stop Orders for TFEX Traders
Risk Control
The source presents risk control as the main benefit. In a leveraged TFEX market, even a small price move can materially affect an account. Setting a Stop Order in advance may automate a Stop Loss: if price moves against the position and reaches the level the trader accepts, the order may be triggered to close the position. It is intended to limit a loss and preserve capital.
Set Conditional Orders Without Watching the Screen
A Stop Order may allow traders who cannot watch the screen all day to set conditions in advance. The source describes it as monitoring the market and sending an order when a breakout, breakdown, profit target or Stop Loss condition is triggered. This can add flexibility, but does not remove execution risks.
Basic Steps for Setting a Stop Order
Trading systems may have similar steps, according to the source.
Select the Stop Order Function
Open your TFEX trading platform and look for a button or field called “Stop Order” or “Conditional Order,” which the source says is often near the upper-left area of the order-entry screen. Selecting it opens additional fields for setting conditions.
Enter the Order Conditions
The source lists these fields:
- Contract: Choose the TFEX contract to trade, for example, S50S21 in the historical example.
- Order Type: Choose whether to open a position (Open Long/Short) or close one (Close Long/Short).
- Price Condition: Choose a condition such as greater than or equal to (>=), or less than or equal to (<=).
- Trigger Price: The price at which the Stop Order condition is met.
- Order Price (Limit Price/Buffer Price): The price of the order submitted after the trigger. The source recommends leaving a buffer to reduce the chance of the order being skipped or rejected.
- Quantity: Enter the number of contracts.
The source recommends using “Last” as the trigger reference because it is the price of an actual trade, which it says may reflect market conditions more accurately than Bid or Offer prices that may not have matched.
Use a Stop Order to Open a New Position: Follow Long or Short
The article says Stop Orders can be used to open positions in the direction of a trend after a breakout or breakdown, not only to set a Stop Loss.
Case 1: Follow Long After a Resistance Breakout
Suppose you want to open a long position when the S50S21 index breaks above resistance at 970 points.
The source's example settings are:
- Select Stop Order.
- Choose Long Open.
- Select contract S50S21.
- Set the condition to Last >=.
- Set Trigger Price to 970.1, so price has moved above 970.
- Set Limit Price/Buffer Price to 972, above the trigger to reduce the chance of the order being skipped or rejected if price rises quickly.
- Enter the quantity, such as 5 contracts.
The source's order review says: if S50S21 Last is at least 970.1, open 5 long contracts at a price no higher than 972.
A buffer is important in the example because a fast gap may cause an order to be rejected or skipped. The buffer may improve the chance of a match, but the execution price may differ from the trigger.
Case 2: Follow Short After Support Breaks
Suppose you want to open a short position when S50S21 falls below support at 900 points.
The source's example settings are:
- Select Stop Order.
- Choose Short Open.
- Select contract S50S21.
- Set the condition to Last <=.
- Set Trigger Price to 899.9, below 900.
- Set Limit Price/Buffer Price to 898, below the trigger to reduce the chance of the order being skipped or rejected if price drops quickly.
- Enter the quantity, such as 5 contracts.
The source's order review says: if S50S21 Last is no higher than 899.9, open 5 short contracts at a price no lower than 898.
The source again notes that a buffer may increase the chance of a match during a gap, while the execution price can differ from the trigger.
Use a Stop Order to Close a Position: Stop Loss
The source describes a Stop Loss as an important part of TFEX risk management for limiting a loss to an acceptable level.
Case 1: Set a Stop Loss for a Long Position
Suppose you hold a long position in S50S21 and want a Stop Loss if price breaks below 700 points. The source's settings are:
- Select Stop Order.
- Choose Short Close to close the long position.
- Select contract S50S21.
- Set the condition to Last <=.
- Set Trigger Price to 699.9, below 700.
- Set Limit Price/Buffer Price to 698, below the trigger.
- Enter the number of long contracts to close.
The source's order review says: if S50S21 Last is at or below 699.9, close X long contracts at a price no lower than 698.
Case 2: Set a Stop Loss for a Short Position
Suppose you hold a short position in S50S21 and want a Stop Loss if price breaks above 1,000 points. The source's settings are:
- Select Stop Order.
- Choose Long Close to close the short position.
- Select contract S50S21.
- Set the condition to Last >=.
- Set Trigger Price to 1000.1, above 1,000.
- Set Limit Price/Buffer Price to 1002, above the trigger.
- Enter the number of short contracts to close.
The source's order review says: if S50S21 Last is at or above 1000.1, close X short contracts at a price no higher than 1002.
Stop Order Precautions and Tips
Understanding the order fields and platform behavior is important if an order is to work as intended.
Why the Source Recommends the Last Price
For the trigger condition, the source recommends selecting “Last,” the price of an actual matched trade. It says Bid or Offer prices may trigger an order when no trade has occurred or may fail to trigger it even after the market has moved to the relevant level. This behavior depends on platform implementation and should be verified with the broker.
Set a Buffer Price to Reduce the Chance of a Skipped Order
The source emphasizes setting a buffer in the Limit Price field. In volatile markets or around major news, price may gap quickly. If the Limit Price equals the Trigger Price or leaves too little room, the order may be rejected or not matched, according to the article. A suitable buffer may improve the chance of a match, though the execution price may differ from the trigger. A buffer that is too wide may result in a less favorable price, so the source says to consider volatility and acceptable risk.
Review the Order Before Confirming
Before pressing “Confirm,” review:
- Is the contract correct?
- Is the order type (Open Long/Short or Close Long/Short) correct?
- Is the price condition (>= or <=) correct?
- Is the Trigger Price correct?
- Is the Limit Price/Buffer Price correct?
- Is the quantity correct?
The source says checking these fields may prevent input errors that could open a position in the wrong direction or lead to unnecessary losses.
Conclusion: Stop Orders as a TFEX Tool
The source describes Stop Orders as tools for setting conditional orders, managing Stop Losses and opening positions to follow a trend without continuously watching the screen. It says understanding the order and using it correctly may support discipline and reduce emotion-driven decisions.
Additional Recommendation
The article recommends practicing Stop Order setup in a simulated system (paper trading) before using real money, and reviewing the strategy as market conditions change. The article's examples are educational and refer to an older contract series.
Related article: Building a Robust Trading System — Expert Review (Thai)
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Written and edited by: Krittiya Kunabramas (Kru Kook)
Full-Time Trader with 14+ years of experience · DW06 trading competition champion in 2019 · Guest speaker for leading financial institutions and brokers.