where a stop loss might not work?

[schizo]

BUT....

Having a stop loss will also drain your account in a volatile market, since there will be a lot of false triggers.

With all the money you save in a volatile market on false triggers, you can afford to take a bigger loss. The bigger players also know where most retail stop losses are at and can use it against you.

I hear ya. There are in fact many false triggers. However, I have been through many bear markets to know that not all of them will be false. As a result, your trading career will effectively be over.

Think of it this way. Even if you get stopped out many times, as long as you're able to keep those losses relatively small, you could make it all back with 1 or 2 large wins. But if you are careless to trade with no stop loss and the damn price simply falls off the cliff like in 2008, your losses will be so catastrophic you're pretty much done at that point.

 

[jnbadger]

There's only one comment so far that I somewhat disagree with. We shouldn't trade a volatile market? My best days come from volatile markets.

But, even though friends of mine have racked up record days during extreme volatility, there are times when I say to myself "This is just too crazy". There's no empirical evidence that I suck during major volatility, but there is definite evidence of major slippage.

As far as stops go, I'm sure stop hunting still happens (A bit off topic, I know). Hell, some of my best mean reversion trades happen after a failed technical pattern. But I'm 100% manual, so I'm always looking at the L2's to see if it's feasible to get out with a decent loss.

But I have a question for the original poster:

EalanorK80, I've read some of your previous posts, you strike me as a calm, incredibly intelligent person. And you haven't responded to any of the responses. Are you after answers, or are you running some kind experiment, or writing a Phd paper?

I do NOT mean that question to be disrespectful in any way. I'm just curious.

Thanks.

JNB

 

[Laissez Faire]

The CPI releases last fall comes to mind.

Up until those, I figured one would be safe going into a news release with a stop in place expecting some slippage of course, but those were some nasty and instantaneous huge drops.

EalanorK80, I've read some of your previous posts, you strike me as a calm, incredibly intelligent person. And you haven't responded to any of the responses. Are you after answers, or are you running some kind experiment, or writing a Phd paper?

I was thinking maybe it's a bot.

 

[jnbadger]

I was thinking maybe it's a bot.

I'm looking forward to the response to this.

 

[schizo]

I'm looking forward to the response to this.

 

[traider]

The CPI releases last fall comes to mind.

Up until those, I figured one would be safe going into a news release with a stop in place expecting some slippage of course, but those were some nasty and instantaneous huge drops.



I was thinking maybe it's a bot.

How can I get it too?

 

[Cabin111]

That's why you stick with oil futures people!!

Nothing negative could ever go wrong with them...

 

[traider]

There's only one comment so far that I somewhat disagree with. We shouldn't trade a volatile market? My best days come from volatile markets.

But, even though friends of mine have racked up record days during extreme volatility, there are times when I say to myself "This is just too crazy". There's no empirical evidence that I suck during major volatility, but there is definite evidence of major slippage.

As far as stops go, I'm sure stop hunting still happens (A bit off topic, I know). Hell, some of my best mean reversion trades happen after a failed technical pattern. But I'm 100% manual, so I'm always looking at the L2's to see if it's feasible to get out with a decent loss.

But I have a question for the original poster:

EalanorK80, I've read some of your previous posts, you strike me as a calm, incredibly intelligent person. And you haven't responded to any of the responses. Are you after answers, or are you running some kind experiment, or writing a Phd paper?

I do NOT mean that question to be disrespectful in any way. I'm just curious.

Thanks.

JNB

Which data feed do you use for L2? Do you pay for a more professional feed?

 

[murray t turtle]

1) Scheduled time gaps (overnight is best example)............................................................
4) Too thin liquidity for your order size. Liquidity is inversely related to volatility, so "too volatile markets for your order size" would be another way of saying it.

.

%%
THAT;
+cash metals where profit is based on huge bid \ask, so just pay attention to weekly prices.
ONE time i went to cash metals dealer + strangely he was surprise closed + decided not to check in with another dealer, I did fear they were going to down spike my profit , not a total loss\ but big trend elephant trunk sell signal against me. Most money is made on overnite gaps + repeat
Actually went the other way Up spike in profits; so just make sure to trade with a % you can afford to lose or could lose with out market heart break, as a figure of speech...........................
Song says Wave After Wave/Pat Green, no problem; unless you live in a muzzie nation where the wave killed 500,000 +/

 

[Ironplates]

When are situations or market conditions where a stop loss might not effectively protect a position?

options trading.
because the stop is just a time to take action and restructure the arrangement and/or the premium paid or credit risk can serve as your stop.