Stop loss or price alert on DEGIRO? How to avoid being stopped out

A stop loss order on DEGIRO becomes a market order as soon as the price hits your stop level and then sells at the next available price, even if the drop is over an hour later. A price alert sells nothing: it tells you the level has been hit and leaves the decision to you. Many investors combine the two: an alert at their own limit and a stop loss further down as a safety net.

What a stop loss on DEGIRO actually does

DEGIRO’s order policy puts it like this: as soon as the price reaches your stop level, DEGIRO sends a predefined market order to the exchange (DEGIRO, Orders and Order Execution Policy). Two things in that sentence are easy to miss.

First, it is a market order. You sell at the best price available at that moment, and in a fast fall that can be well below your stop. A stop at €50 does not guarantee a sale at €50.

Second, if there are no visible market maker quotes, DEGIRO says the stop loss will not be released. For some products your safety net fails exactly when the market goes quiet.

DEGIRO has two variants:

• Stop limit. At the stop level a limit order is placed instead of a market order. You never sell below your limit, but you may not sell at all.
• Trailing stop. The stop level moves up as the price rises. At DEGIRO this is only available on Xetra and Frankfurt.

Why you get stopped out for nothing

A stock that moves 2% a day on average will sooner or later hit a stop 3% below the price through ordinary noise. You sell, the price recovers in the afternoon, and you buy back higher and pay transaction costs twice. How that adds up is shown in DEGIRO cost overview: what is cost drag?.

The opposite happens too. On 15 October 2024 ASML accidentally published its quarterly results a day early and the share closed 16% lower (CNBC, 15 October 2024). Stop losses were triggered that afternoon. Whether you wanted to sell at that level depended on what you made of the results. An order can’t make that call for you.

What a price alert does differently

A price alert executes nothing. It says “your level has been hit” and then you look. That has one advantage and one drawback.

The advantage: a temporary dip or an opening gap costs you nothing if you decide to stay in. You can read the news first.

The drawback: you have to act yourself. If you’re in a meeting for three hours, the alert didn’t help. And if you find a reason to stay in every time an alert fires, you no longer have a stop.

An alert works on the way in as well: a level below the current price tells you when a share on your wish list has become cheaper, see buying the dip with an entry price alert.

Which DEGIRO extensions have price alerts is shown in the comparison of DEGIRO Chrome extensions, and for trackers in general in the DEGIRO portfolio tracker comparison.

When to choose which

The combination: alert as first line, order as safety net

What works well in practice is two layers:

1. A price alert at your own limit. For example 10% below your purchase price. This is where you think: has the story changed, or is it the market?
2. A stop loss order further down. For example 20% below your purchase price, good till cancelled. It only triggers if you don’t react in time or if the price drops in one go.

That way noise doesn’t stop you out, and you still have a limit while you’re on holiday for a week.

One caveat: a good-till-cancelled order at DEGIRO can be deactivated without your instruction. DEGIRO itself advises checking regularly whether the order is still active (DEGIRO, Orders and Order Execution Policy).

Setting up the two layers in ClearAnalyser

In the Scenario Alerts tab of ClearAnalyser you set up to three scenarios per position. A setup for the combination above:

• Bear, role “Stop”: trigger “Return vs. avg. cost price” at −10%. You get a Chrome notification (free) or an email (Premium).
• Base, role “Neutral”: trigger “Trailing from peak” at 15%. This is your trailing stop, as an alert and on any exchange.
• Bull, role “Target”: trigger “Price above” at your price target.

With Premium you also get an early warning when the price comes within a few percent of your stop. And you can have an order prepared for each scenario: if you decide to sell after the alert, DEGIRO opens with the stop loss or limit order already filled in. You confirm it yourself. Step-by-step instructions are in setting a DEGIRO price alert.

How far below the price your stop should be and how many shares that lets you buy is worked out in Risk/reward and position size for your DEGIRO shares.

Frequently asked questions

Is a stop loss on DEGIRO executed at my stop level?

Not guaranteed. At your stop level a market order is sent, which executes at the best available price. In a fast fall or an opening gap that can be clearly lower.

Does DEGIRO have a trailing stop?

Yes, but only for orders on Xetra and Frankfurt. For other exchanges you can use a trailing alert, such as the “Trailing from peak” trigger in ClearAnalyser.

Can the market see my stop loss?

Depending on the exchange, DEGIRO places the stop loss on the exchange itself or keeps it in its own systems until the level is hit. A price alert in ClearAnalyser only exists on your own computer and is visible to no one.

How quickly do I get an alert?

ClearAnalyser checks the price every 1, 5 or 15 minutes during trading hours, depending on your setting. A price alert is therefore not suited to situations where you must react within seconds; an order at your broker is better for that.

Sources: DEGIRO: Orders and Order Execution Policy (pdf) · DEGIRO: What are the different order types? · CNBC (15 October 2024): ASML share plunge wipes over $50 billion off Dutch chip giant’s value · Investopedia: Stop-Loss Order