Um you didn’t show enough of the chart to see the proper place to put a stop. Plus you didn’t indicate where the stop was placed. Can you show more of the chart and also the TF? That is probally just an algo.
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- Thread starter Pekelo
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A Good Point - Stoploss taken out or Insufficient Margin Requirements. Both will result in the same manner - A Close on existing Position.
What instrument was this?
I drew that for illustration purposes. I didn't feel like flipping through a bunch of intradays to find one. But it happens all the time. Next time I see one live I'll screen shot and post it here.
There was one this week on a stock I was playing... I'll see if I can find it.
Edit... not the best example depending on how tight your stops are or if you have a very large position open and you're playing for a few pennies...but look at a one minute chart of QCOM yesterday (3/9) at 1550 EST. Thats a 12% move of the day's range in one paint.
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Need to see it on a very liquid instrument. If the instrument is illiquid, then a trader must use mental stops .
Granted... I really don't know too much about what goes on behind the scenes with market makers and the likes and what they are or are not capable of doing or hitting the tape with.
But take a stock like Micron (MU)...(not sure if you consider that liquid.. but it trades millions daily) ....and say its trading in a day-range between the high of $48.95 and a low of $46.75 and its trending down approaching the day's low.
You open a short position at $47.20 with a stop at $47.59. You're watching it real-time on level 2 and all of the sudden out of nowhere a print for $48.75 hits the tape for like 200 shares.
How the hell that happens I have no idea. But the result is, if you have a programed stop... it fires.
And it happens all the friggin time.
Granted there are ways around it. Perhaps using a stop limit order... but this can burn you too because say some earth shattering news just broke and MU deserves to spike up $1.50 and keep going... your limit order to buy is never going to fill.
They need to create multi-factor stops in these trading packages... where one can insert multiple variables like % change in volume or # of shares traded within a given time delta... then hard stops would be way more useful.
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When you do give us the TF and enough chart to see back several bars.
I drew that chart, I just explained that. Put any TF on it you want. I also gave a specific intra-day example using QCOM.
Its a made up hypothetical situation. Such things can readily be created to illustrate a point. Show a real example in say a futures contract like Es and yes TF does matter.
I've never traded ES. Nor did I say TF doesn't matter. I merely posted what I have observed as an active intra-day stock trader. Did you look at QCOM? Thats a stock... not an index.
If you like stops and they work for you on ES... well god bless you and may manna from heaven rain down upon you. I could give flyin fuck f*ck. More power to ya. Move on.