Emergency Orders and Recovery

Second Officer · SO02: Placing and Managing Orders · About 25 minutes

Safety rule: When a trading error happens, stop adding orders until you know your actual exposure.

Your mission today

By the end you can follow a safe demo recovery checklist for an incorrect or unprotected trade.

Before you start

Complete SO02.4 and work only in a demo account. Place the trade, positions and history tabs where you can see them together. Have a written emergency checklist ready before you begin.

1. Mistakes are events, not invitations to gamble

An airline crew does not respond to a warning by pressing more random buttons. They identify the problem, protect the aircraft and follow a known procedure.

A trading mistake requires the same discipline. You may have selected the wrong symbol, wrong volume or wrong direction. A protective stop may be missing. You might lose internet while an order is still active.

The first step is STOP NEW ORDERS. The second is VERIFY THE ACTUAL ACCOUNT STATE. Only then decide which authorised action the platform and broker permit.

Do not send an opposite order blindly. On some account types it may reduce a position; on others it may create another position.

2. Worked example: the wrong size multiplies a loss

Imagine a demo account where your plan permits 0.05 lot of a fictional EURUSD contract. Under the stated imaginary specifications, that size loses $0.50 per adverse pip.

You plan a stop ten pips from entry. Intended price risk is 10 × $0.50 = $5, before fees.

But the order actually fills at 0.50 lot, ten times your intended size. The same ten-pip adverse movement now represents $50 planned price loss. The error increased your exposure by $45 before other costs or slippage.

If price later favoured you, the oversized position might make money. That would not make the original decision acceptable. The correct action is to recognise the mismatch and follow the documented demo recovery procedure immediately.

Record the planned volume, actual filled volume, time you noticed the error, corrective action and final history. Never rewrite the ticket to pretend you intended 0.50 lot.

Original Black Box Journey teaching illustration. Synthetic example; not historical market data.

3. Your six-step emergency checklist

Use this sequence for every drill:

1. Stop: Do not open another trade to "fix" the result.
2. Confirm account: Check demo versus live, server and symbol.
3. Identify exposure: Read every open position, pending order and actual lot size.
4. Check protection: Confirm whether the server accepted a stop, not just whether you requested one.
5. Take a documented corrective action: Use only the broker's authorised order or position controls.
6. Reconcile and debrief: Save history, timestamps, differences and what to change in the checklist.

If the terminal is disconnected, do not assume all orders vanished. Reconnect using the broker's documented process or seek its authorised support channel when needed.

Do not send an account password or secret access code to an unsolicited helper.

4. Match each problem with a clear response

Wrong symbol: Stop and inspect the filled position. Correct it using the documented close workflow in demo, not a random second position.

Duplicate order: Check whether one or both orders actually filled. Remove unintended pending orders and handle open exposure based on the account mode.

Missing stop: Verify whether the stop request was rejected. Follow your emergency rule for an unprotected position instead of waiting for the market to be kind.

Rejected order: Read the platform response and symbol restrictions. Do not widen size or change risk without restarting the pre-trade check.

Internet outage: Use the broker's supported recovery path. Assume the exposure remains until server history confirms otherwise.

Spread spike, gap or halt: Stop entering new trades and document the market and execution state. Do not assume a stop can fill at an unavailable price.

The shared rule is to replace assumptions with confirmed server records.

5. Decide when it is safe to resume practice

After an error drill, write a short incident report. An incident is an unexpected event that affected, or could have affected, a planned trade.

Record what was intended, what actually happened, how you found out, what you did, and what rule will prevent a repeat. Add one screenshot of the mistake and another of the corrected state.

Resume normal demo exercises only after you can show the account's actual exposure and explain your chosen action. A fast recovery is less important than an accurate one.

Common mistake

A learner discovers a duplicate Buy and immediately opens a Sell to offset it. That may create a new position rather than closing the original. Fix it by reading the account's netting or hedging rules and using the correct close-position control.

Plain-English glossary

• Exposure: The market risk created by open positions or active instructions.
• Duplicate order: An unintended second instruction or fill.
• Rejected order: A request the server did not accept.
• Unprotected position: Open exposure without a confirmed intended exit control.
• Incident report: A factual record of an unexpected trading event.
• Recovery procedure: A written sequence for checking and correcting a problem.

Try it yourself

Practise ten scenarios in a demo or supervised simulation: wrong symbol, wrong size, duplicate, missing stop, rejected request, disconnect, halt, gap, spread increase and stale quote. For each, write STOP → VERIFY → CORRECT → RECONCILE. Save the before-and-after exposure and explain why the chosen action was authorised. If you cannot reproduce the result, the drill is not complete.

What you can now do

• Identify a wrong or unprotected demo position from actual records.
• Follow a deliberate emergency response without adding accidental exposure.
• Write a reproducible incident report after a practice error.

Next lesson

SO03.1 · Exact Profit and Loss for Long and Short. You will calculate how fills and position size affect the real cash result.