No daily trading limits on metals

TraDaToR

TraDaToR

Hello metals traders,

How do you deal psychologically with the fact that there is no daily limits and that anytime you're placing a limit order in the book, you can be caught in an ulimited fat finger...?

As a non metal example, on oct 5th on IPE UK natural gas which also has no trading limits, there has been a 90K$ per contract spike... Think about the guy that had stop losses and was execcuted on top of the spike... I don't know if the trades have been busted, but it doesn't seems so...

It can simply be a carrier ender. 1 second and you lose everything plus more to reimburse the clearing firm.

I trade gold, silver and copper, and don't feel confident right now.

Thoughts?
 
The example I chose was a data error, so I 'm quite relieved... Does anyone know if it has ever happen? Let's say a 50K$ per contract spik that never got busted? The 2 year note one in the summer was crazy too, how much was it on a $ per contract basis?

It's not something you can hedge against or anticipate, anybody placing a non marketable limit order on a no-limit market can face these things. If you're filled on top/bottom of it, you just have to pray the control center will bust it...
 
If something has a daily limit it can be locked up or down the limit for the day or even several weeks as Coffee was in the 90's.

Limits are the devil...

I have always started off with an options play and then converted to outrights when I had a cushion of profit under me so no event has ever crushed me.
 
I am just saying limits are a good way to avoid gigantic fat fingers... However I agree that limits on an ordinary volatile trend day have no real purpose...
 
Quote from TraDaToR:

The example I chose was a data error, so I 'm quite relieved... Does anyone know if it has ever happen? Let's say a 50K$ per contract spik that never got busted? The 2 year note one in the summer was crazy too, how much was it on a $ per contract basis?

It's not something you can hedge against or anticipate, anybody placing a non marketable limit order on a no-limit market can face these things. If you're filled on top/bottom of it, you just have to pray the control center will bust it...
More...

About 2 or 3 times a year I used to get errors on my trade screen saying that I was down a gadzillion dollars.

It is a great time to play a joke on the wife that is for sure :eek:

You cannot trade based on what would happen given the worst possible scenario (like these other gold traders :D)

Trade 5 to 10 times smaller positions in the outright and every thing will be gravy.
 
I don't trade big positions, but still... On an entire career, it would be unrealistic not to take those scenarios into account...
 
Quote from TraDaToR:

Hello metals traders,

How do you deal psychologically with the fact that there is no daily limits and that anytime you're placing a limit order in the book, you can be caught in an ulimited fat finger...?

As a non metal example, on oct 5th on IPE UK natural gas which also has no trading limits, there has been a 90K$ per contract spike... Think about the guy that had stop losses and was execcuted on top of the spike... I don't know if the trades have been busted, but it doesn't seems so...

It can simply be a carrier ender. 1 second and you lose everything plus more to reimburse the clearing firm.

I trade gold, silver and copper, and don't feel confident right now.

Thoughts?
More...

How are you trading copper and silver?
 
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