Stop vs Stop-Limit Orders: Trigger and Fill Assumptions in Pine

Separate the trigger from the acceptable fill

For a protective sell order on a long position, the stop normally sits below the current market. The trigger activates the order; it is not a reservation of liquidity. Investor.gov describes these mechanics for stock orders. Confirm the order types and trigger rules with the broker for your instrument.

• For a buy stop used to cover a short, the direction reverses: the trigger is normally above market and the buy limit is the maximum acceptable price.
• A sell limit below the stop gives some room after activation. Setting both equal is permitted by some systems but leaves no price buffer; it does not assure a fill.
• A trailing stop changes how the trigger moves. Its eventual market or limit behavior still needs to be specified.

A 100-share gap example

Assume a hypothetical long position of 100 shares bought at $100, a sell stop at $98, and an alternative stop-limit with the same stop and a $97.50 sell limit. Both alternatives are active before the event. Ignore fees and assume the stated fills cover all 100 shares. These are separate scenarios, not observed trades or guaranteed broker outcomes.

• Planned stop risk was ($100 - $98) × 100 = $200. The $94 exit loses 3 times that amount before costs.
• The $0.50 gap between stop and limit is an execution constraint. It is not a $0.50 cap on further losses.
• A temporary rebound can produce a fill, but neither a later recovery nor available buying size is assured.

Pine uses the same parameter names for different orders

The function matters. TradingView documents a single stop-limit order when strategy.entry or strategy.order receives both stop and limit. With strategy.exit, the same pair creates separate stop-loss and take-profit orders. Treating that bracket as a stop-limit exit changes the experiment.

• stop and limit are absolute price levels. strategy.exit loss and profit use tick distances; a dollar amount or percentage cannot be substituted without conversion.
• A visit to the limit price before the stop activates does not fill an inactive limit order.
• Manage cancellation and remaining quantity if another exit can close the position. A leftover sell order can otherwise create an unintended short.

Run one controlled exit comparison

This Pine v6 example enters one unit once, then submits one opposing order for that position. Toggle only the exit type between runs. It places protection at the first bar-close calculation that sees the filled entry, so the entry bar is unprotected until that calculation. That deliberate timing limitation must remain visible when interpreting the result. This is an order-mechanics example, not an entry strategy.

• Keep chart history fixed: entryBar is an index from the first loaded bar, so loading different history changes the selected entry.
• Two ticks of configured slippage apply to eligible market and stop fills. On a $0.01 tick symbol that is $0.02 per share, not 2%. The limit offset defaults to five ticks.
• There is one entry and no competing exit, scale-in, or re-entry. Adding any of them requires explicit pending-order cancellation and quantity handling.
• Inspect an unfilled stop-limit as an open exposure. Do not compare only closed-trade profit if one version never exits.

//@version=6
strategy("Stop or stop-limit exit comparison", overlay = true, initial_capital = 100000, slippage = 2)
bool useStopLimit = input.bool(false, "Use stop-limit exit")
int entryBar = input.int(20, "Entry signal bar index", minval = 1)
float riskPercent = input.float(2.0, "Stop distance (%)", minval = 0.1, maxval = 50.0)
int limitOffset = input.int(5, "Sell limit below stop (ticks)", minval = 0)
var bool armed = false
var float stopPrice = na
var float limitPrice = na

if bar_index == entryBar
    strategy.entry("Long", strategy.long, qty = 1)

if strategy.position_size > 0 and not armed
    stopPrice := math.round_to_mintick(strategy.position_avg_price * (1.0 - riskPercent / 100.0))
    limitPrice := stopPrice - limitOffset * syminfo.mintick
    if limitPrice <= 0
        runtime.error("Use a positive-price symbol and a smaller limit offset.")
    strategy.order("Protect", strategy.short, qty = strategy.position_size, stop = stopPrice, limit = useStopLimit ? limitPrice : na)
    armed := true

plot(strategy.position_size > 0 ? stopPrice : na, "Stop", color.red, style = plot.style_linebr)
plot(strategy.position_size > 0 and useStopLimit ? limitPrice : na, "Limit", color.orange, style = plot.style_linebr)

Audit what the broker emulator can and cannot establish

Historical fills depend on the available price sequence and active orders. A candle touching both levels does not establish activation order. Start with standard candles and save the simulation settings with each result.

Check broker rules before carrying the result into execution

A Pine backtest does not establish the rules of a connected brokerage account. Investor.gov notes that firms can use different stop triggers, including last-sale or quotation prices. Obtain the policy for the exact instrument, venue, and order ticket.

• Verify the trigger reference: last trade, bid, ask, or another documented price. A chart price alone may not be that reference.
• Check eligible trading sessions, time in force, handling of halts, and whether the order is held by the broker or venue.
• Ask how partial fills, modifications, and cancel requests affect the remaining quantity. A submitted cancel request is not evidence of cancellation.
• Record the response if the stop-limit remains unfilled. Any later conversion to market creates a new execution decision with its own price risk.

Record planned risk separately from the outcome

Keep the entry, quantity, stop, limit, order submission time, trigger time, fill prices, and remaining quantity in your review. Use Pineify to make the simulation rules explicit, then use Trading Journal notes and trade records to compare the plan with actual execution.