Stop loss

m.k.a 2017-12-30 08:13:55 UTC #77

that dude was normal no deep knowledge as you mention as i remember it was just oanda and alexander books i cant remember much more the dude was gain knowledge from this website and other forums like rest of us learnt it from trial and error and slowly move on futures , we not competition and no one really better than other , i hate people call this and that a bullshit or garbage post as some in other topic said to me screw them i was just about to post something no need to be aggressive that way , if trends wants to use no stop loss as he frequently long or short and he moderate it and he is ok with it just let him do , i remember you over leveraging in your system but no one said was wrong , riskonfx too he didnt yet start his journal was six month ago when you going to do it bro call us when you ready , when i think everything that way is just make more sense, now if trends give us some strategy in this topic i thank him i was never look at that stuff just new idea

_bob 2017-12-30 08:28:44 UTC #79

Now go back and review the thread. At post 17 it got hijack by the normal crew and deteriorated from there constantly getting bumped with its not raining then its fine comments.

There are plenty of other threads in regards to stops one could choose to post on.

m.k.a 2017-12-30 08:57:11 UTC #80

im long time dont care these rules which is broken thousand times by new users and its not something new in here and other forums but i could really care how trends trade his charts
what he post was related somehow as most of all these questions from op are not much specialize

_bob 2017-12-30 09:06:08 UTC #81

What you should care about is how you trade your charts.

m.k.a 2017-12-30 09:09:12 UTC #82

im doing fine and i care about that why im here seeking new things from everyone to develop my things if needed so

Trendswithbenefits 2017-12-30 14:56:46 UTC #83

Pay no attention to these posters on BP... they have very little actual content to add to their insults.

Posting information like this shows them up for the circus performers they are..shouting down any strategies that they haven't put forward, liking each others posts like it's a brofest..... These guys are forum nazi's telling posters what to do and how to do...their way or no way.... ignore them and learn from all threads that are posted...

If the system above works for you, demo it, if it doesn't work... maybe take some ideas from the thread.

Trendswithbenefits 2017-12-30 15:26:51 UTC #84

The OP started this thread over 10 months ago... the conversation had moved on... my post(s) offered an alternative to the issues mentioned in the 2 posts above (and others), 5 - 7 months after the OP's original post.

So please check your facts before teeing of on a tirade off name calling and bull$hit accusations..... Posters are tired of your negative posts, add real content instead of berating every post you respond to Bob... it's getting boring..

anon88459104 2017-12-30 15:46:30 UTC #85

A mechanism such as the Futures market perhaps? - they have equity 'circuit breakers' when price moves 5% over night. Normal trading hours include 7%, 13% and 20% down limits.

This is how such circuit breakers actually operated on the CME Futures market with the above GBP/USD flash crash..

(a) 00:07:15 BST: sharp price movements over a two-second window trigger a velocity logic event which pauses trading on the CME for 10 seconds.

(b) 00:07:29 BST: the futures price reaches its lower limit of 122.17 (based on the change on the day). The exchange remains open, but transactions cannot take place below this price on the CME. A two-minute monitoring period begins.

(c) 00:09:29 BST: as the futures price has not rebounded from the lower limit by the end of the monitoring period, a further two-minute trading
halt is triggered on the CME. At 00:11:29 BST, the exchange reopens with a new (lower) price limit.

(d) 00:11:57 BST: a second velocity logic event is triggered by sharp price movements over a two-second window, again pausing trading for 10 seconds

Sources: Bank of England calculations; CME; Bloomberg.

The above chart shows a 9% flash crash during the early Asian session.

The event can be split into three distinct phases. First, the early phase of the
move, during which sterling depreciated rapidly from 1.26 to around 1.24 against the
dollar in response to significant selling flow, but in an orderly fashion and with broad
participation on key venues. Second, a period of a number of minutes of extreme
dysfunction during which sterling fell further, rebounded and then traded in a wide
range. This phase involved lower volumes and narrower participation, pointing to a
greater role for the actions of individual market participants as a driver of the sharp
moves. And finally, the gradual recovery in market liquidity over the hours that
followed.

I've always been a fan of applying a 5% circuit breaker in FX - but we know this just isn't possible, not to mention the fact that FX is not a centralized market.

So yes, I would most certainly want to use a SL in this case, regardless of it being honored (which it wouldn't be in this case) - lets at least try to minimize the hemorrhage of bleeding?

The below report may be of some interest from the Bank of International Settlement (BIS). It clearly illustrates how no SL would have been honored due to an outrageous decline in market liquidity. Ironically as retail traders we don't even hit the real underlying market, we just bet against the broker, but I can also bet your last dollar that the MM brokers would mirror the LPs.

To add, the report also touches on Twitter news feeds - a key focus area that gave cause [one of many] to the flash crash due to social media algorithms short selling GBP/USD; after this occurred the short selling kicked in from all institutions causing the biggest flash crash we've seen in recent times in one of the most liquid, highly traded and supposedly stable major FX pairs.... GBPUSD Flash Crash Report 07_10_2016.pdf (548.0 KB)

So? You still don't want to use a SL - I'll allow you to decide

tommor 2017-12-30 15:56:26 UTC #86

???

I'm not accusing anybody of anything. Except perhaps the scalpers who went broke already, and I'm happy to accuse them of ignorance of risk.

As for negative posts, every post can be seen in a negative way but I've certainly tried to post positive info that I have gleaned from my own experience trading.

Anyway, I'm Tom, who are you calling Bob?

Trendswithbenefits 2017-12-30 15:59:38 UTC #87

Not aimed at you at all Tom.... I was just showing Bob (read back up through the thread) which posts I was responding too after being accused of hijacking the thread......

LukasVisser 2017-12-30 16:01:42 UTC #88

I'm happy to accuse the swing traders who went broke already of that, too.

You're right as far as retail trading's concerned, of course; but most retail traders are losers anyway.

If you look at a successful group of traders, such as "institutional traders" earning fat salaries and fatter bonuses, you'll actually find a pretty high proportion of scalpers.

But what many people here describe as "scalping" actually has nothing to do with scalping, anyway.

tommor 2017-12-30 16:02:17 UTC #89

Oh, THAT Bob..........

tommor 2017-12-30 16:04:31 UTC #90

Yes I realise the everyday use of "scalping" has drifted but that's the popular use so I'm happy to not be too picky over it.

Of course,m you might say most retail traders go broke whatever they do. But I say they mostly go broke BECAUSE they're daytrading / scalping.

Trendswithbenefits 2017-12-30 16:43:01 UTC #91

The article highlights the absolute exposure to the markets that the simple retail trader risks. When an event like this occurs, traders can be left owing more funds than they had available in their accounts, some lose $1000's... some lose even more.

A Stop Loss won't save you in a situation like this, nor will any open or close point on an oscillating indicator.

My Bots have equity protection logic built in, so if at any time the position generates 0.7 - 2% drawdown the logic kicks in and gradually reduces the position maintaining the predetermined risk level. But even this will not save against the situation detailed above...

Zero balance account protection (offered by some brokers) is really the only way to minimise losses as long as you have enough margin to comfortably cover your lot sizes in your trading account. A daily/weekly withdrawal regime can be used to keep your account at a predetermined level. So if a situation like the unpegging of the Swiss Franc transpired again, the traders only exposure is their account balance.

anon88459104 2017-12-30 16:49:44 UTC #92

Absolutely - And I think this is the middle ground that we all need to understand, far to often new traders and moderate traders still have the assumption that Stops will be honored within a narrow range. I've been at this game since 2008, and the thought of being 'caught' on the unfavorable side of a flash crash is always concerning - even if you risk 0.5% or less of your account on a single trade it's going to wipe you out.

I guess the next question is "what can one do to limit the risk of these black swan events", or do we just price this into the game of FX speculation and accept. - if anything... food for thought!

Crash Helmets and "Stop Losses"

anon88459104 2017-12-30 17:10:57 UTC #93

When you look at the flash crash mentioned in more detail you would realize that the previous days low was broken in normal trading conditions, therefore a SL placed on this assumption (which is by far the most popular approach when swing or intraday trading) would be honored and a you would have avoided loosing you shirt.

Falstaff 2017-12-30 17:18:19 UTC #94

Some people put their stops as you say - others put them below the previous swing low, some below the penultimate prior swing low and still others, outside the current trading range.

Are you saying that ANY stop placed in teh market would have been honoured, or just "selected ones" ?

anon88459104 2017-12-30 17:27:34 UTC #95

Not at all, but the previous days low, and previous swing were within or above 1.2250, which according to the below chart had a healthy balance of bid/ask orders - it's below this point where liquidity becomes intermittent.

Falstaff 2017-12-30 17:32:32 UTC #96

Then there is no question of stop -losses "being honoured"

Just a case that "You were lucky to get stopped out before it happened"

Ergo - a stop loss will NOT protect you against catastrophic loss. All it will do is ensure that the broker gets paid when the price breaks the level he can see on the screen - N'est ce pas ?

anon88459104 2017-12-30 17:36:58 UTC #97

Luck really doesn't come into it, if you're placing a stop so wide that you are open to the exposure of the flash crash then you need to evaluate the trading approach which you are using.

The only traders/speculators that 'should' have been harmed in the above event would have been long term positions, which as logic implies is the minority of retail traders?

This isn't an opinion, it's proven in the chart and the report that was issued.

Yes? And this is the point of any SL, regardless of the situation when dealing with a retail MM broker - just like the margin call you would have received.