Serious Question: Can Stops Fail In A Market Crash?

[jack hershey]

Quote from hels02:

Interesting commentary... I grew up on Long Island, and I know exactly where you are talking about on the Sound. Sailing was never my thing, but that was an interesting way of putting your market perspective.

I spent a lot of time at Cold Spring Harbor too, love it... for the antique shops and that wonderful italian pastry shop with the handmade cannoli's! Nifty little insight there about the sailing.

Yes, a real commentary would be nice... I can't watch Cramer's BOOOYAAAHHH more than once a year, just to remind myself of why I don't watch it. I have no clue what he says or promotes, once a year doesn't tell me much about his thinking.

Years ago, I would read his market commentary on TheStreet, but he was 50/50, and I can do better than 50/50 without his advice.

32A is mid sound off cold spring harbor. I sailed out of Greenwich and Byram Park to the East of Greenwich. About opposite Oyster Bay on the Cold spring Harbor side my great aunt had 40 acres up on that bluff. Early 60's. She was true New Yorker and had b stone up town too. Sailing was faster than driving but we had to change clothes....lol... stuffy formal times.

The worst weather I have had bar none is on the north beaches at the east end of long island. You can't come in under the shelter of the bluffs because there are boulders off the beaches.

I came into Deer Island once for sail repairs. We blew out the top of the main while reefed in. Also lost the clew grommet on a storm tri sail jib. I admit my hull was working when I sold it back to the original owner's daughter but I did sail dry bottom for many years.

The closest winning race I ever had in the "Ed Lu" was passing the north bell on block island and going into a spinnaker with half boat overlap and then finishing off Stamford 6 minutes late when they had to give 8 min. Both boats had to vere off at about 10pm that night while tacking NW to head to Plum Gut. We ran way south of BI before we headed home. swels were running 10 feet at the time. The boat (Vat 69 , then Ganymede) I was on was later bought by TJ Watson as a retirement gift for his captain I saw it up in Bath Maine many years later. Over 40 years ago.

 

[jack hershey]

snip

hels02

"Yes, a real commentary would be nice... I can't watch Cramer's BOOOYAAAHHH more than once a year, just to remind myself of why I don't watch it. I have no clue what he says or promotes, once a year doesn't tell me much about his thinking."

I interactred briefly with the CNBC show staff on the "millionaire" and I did watch the first show. The segment on cramer's prep was really a downer for me. And I couldn't handle the psych interactions with Steenberger and Kiev.

I couldn't make the first shows scheduled and I cancelled on the after Easter show.

It's my opinion that a show on daily "market action" would be a killer. It just seems that it could be produced quite skillfully if a crew were narrating it from about four viwpoints where each person could present a certain breadth of knowledge and associated skills. Not in a contest or competition sort of way but more from a strategic orientation.

I can imagine the crew and maybe a guest member too. a famous guest and a crew that is able to really nail it. Unfortunately the crew that grabs me would have to be piped in instead of being all in one room looking at the day unfold.

We do camtasia reviews of market days and they are CD'ed on several levels of display. you can nail at day in 40 minutes ordinarily and I have done meetings with projection that only take 30 mins per day. I shoot for three days in a meeting. Some Q's in each case.

Of all the people I have seen that are great traders live, the assortment would be so contrasting.

It is fair to say also that when several of these guys are in the same room and just dealing with assorted topics, it is a ball when they are unrestrained. very positive even with the disagreements simply because they are disagreeing while really nailing the markets in several ways.


A GS guy really nailed energy a while back. So he quit GS and went solo. He was vaccinated by the GS "chicken quant plague" and still shows the scars.

In contrast, there are several vegas guys who came into trading via the gambling. When GS and gambler are going at it it is incredible. Obviously the Vegas guy can take the GS guys pants off but they both make money.

Senters, on the other hand is down home and did his first scalp with calf trimesters as vet student at auctions. (Buy 3 as 2 and sell as 3 in 20 mins).

2 of those 3 are entry/exit and the other is all in (or in all of the time and scaling like AMT4SW or poergirl).

Anyway three guys and a moderator plus a guest could be quite fast paced and actually very very educational for accomplished traders and very entertaining for college kids who watch cramer and the general public at large.

It could also be done like House where mystery diagnoses could be used as anticipatory set ups (not edges).

Oh last thought. they could do boxes in corners of screen with bone heads screwing it up. Endless sources for these guys.
Pick about 20 edges that do not have planned exits....lol....

 

[TGregg]

Quote from OldTrader:

Really, you need to provide some detail to make this a credible statement.

A stop order (not a stop limit order) will always "work"....you just may not like the execution.

I posted here about a stop that sat on IBs system. ES traded through my stop and kept going. There was no market order transmitted to the exchange.

I repeat. I received no fill. The stop did not execute. It was not a stop limit. It was a pure stop.

IB first claimed that my stop was incorrectly transmitted to them, since it was done through my custom app. Later, as I raised visiblity of the issue, they claimed their communications were down. The color of my stop in TWS never changed.

So yes, it didn't work. I received no fill at any price.

 

[dandxg]

Quote from TGregg:

I posted here about a stop that sat on IBs system. ES traded through my stop and kept going. There was no market order transmitted to the exchange.

I repeat. I received no fill. The stop did not execute. It was not a stop limit. It was a pure stop.

IB first claimed that my stop was incorrectly transmitted to them, since it was done through my custom app. Later, as I raised visiblity of the issue, they claimed their communications were down. The color of my stop in TWS never changed.

So yes, it didn't work. I received no fill at any price.

So let's clarify what was the resulting issue? No one to take the other side or some technical issue? I read your post but we seem to be talking about 2 diff. things. A tech. breakdown doesn't equal a stop market or flat out market order not working. If there is some one to take the other side of the trade then it works. See my point.

 

[TGregg]

Quote from dandxg:
So let's clarify what was the resulting issue? No one to take the other side or some technical issue? I read your post but we seem to be talking about 2 diff. things. A tech. breakdown doesn't equal a stop market or flat out market order not working. If there is some one to take the other side of the trade then it works. See my point.

There's no question that it was a technical issue. For some reason, my broker could not execute my properly transmitted and accepted stop order. But the question was, can stops fail?

And the answer is "Yes indeed they can, have and will on occasion."

Quote from ByLoSellHi:
1) Can stops fail to get a trader out at close to the approximate stop price (I assume this is more likely to occur in smaller cap, lower volume stocks)? When I ask if "they can fail," what are are the odds for a liquid, high volume stock?

2) Is a stop-limit a better option for those trying to limit damage on calamitous days?
Thanks.

 

[Trader666]

Brilliant idea Jack! You and your A-Team would be perfect for this!

Quote from jack hershey:

Oh last thought. they could do boxes in corners of screen with bone heads screwing it up.

 

[jack hershey]

Quote from Trader666:

Brilliant idea Jack! You and your A-Team would be perfect for this!

It certainly would be fun for us.

Maybe you would like to be the moderator one day a week.

It was fun slipping that box note in the post!!

 

[SteveD]

There is a difference between a "limit order" and a "stop loss" order...

Limit: I will buy 1000 shares at $13.75, partial or AON...

Stop: When bid hits $13.75 sell my 1000 shares at MARKET, whatever that may be....

If not enough sellers at $13.75 you may not get filled....qued up..buyers ahead of you...


Stop: Your limit order automatically becomes a market order....

Keep in mind: This applies to NYSE and NAZ....don't know about other exchanges....or ECN???


Good point about technical issues that do not allow order to ever get to exchange for execution.....

My opinion would be if market starts down strong...just get out at once....don't sit and wait for "stop" to be hit....sell at market NOW....

We are traders.....not like someone has a 4 Million share position, LOL.....these markets don't just happen....you can get hints before hand for several days...

SteveD

 

[ZeroSigma]

Quote from TGregg:

So yes, it didn't work. I received no fill at any price.

The true killer - as usual - is well hidden beneath the vivid memories of plane and space shuttle crashes. It is not the overnight gaps/intraday jumps or infrastructure breakdowns that make the stop-loss fail. It is the daily shake-out/whipsaw... slowly but steadily adding to your bleed... the stop-loss being merely a crippled version of the protective put: the one with no start-gain, and the one that can eventually cost you more than theta... in slippage, commissions, jump risk, MM games, revenge trading, missed rallies...

"the expected cost of following the stop-loss, start-gain strategy relative to buying a call option is just the product of the amount we lose each time the stop-loss order is triggered and the expected number of times this occurs. It turns out that this will exactly equal the value of the call" [http://in-the-money.com/artandpap/A Case of Confused Identity.doc]

"the put and stop/buy-back strategies have much more similar profiles under a whipsaw assumption; the latter strategy has slightly more variable returns, with greater downside and upside exposure. Interestingly, the stop/buy-back strategy provides about an equal amount of downside protection whether the stop-loss level is tight or loose. The apparently greater protection of a tighter stop is offset by the increased risk of being whipsawed repeatedly."
[http://www.interactivedata-fia.com/fi_articles/fi_proderivstrategies.html]

 

[bighog]

Good Grief!!!!!

Is Jack Hershey really Charlie Brown? Jack hijacks another thread with rambling nonsense. Wrong Jack, being in the now as you say and being always in and never losing is kind of useless BS to talk about in a thread about STOPS, Correct?

If i used jacks METHOD , well, gee whiz,,,,,, Why would i ever need to even consider using a STOP LOSS order?

jack knows the "END GAME" is to fleece the flock sooner or later. ..

jack, quit ruining others threads