Why are overnight sell stops risky? - Traders Hideout | futures io social day trading
futures io futures trading


Why are overnight sell stops risky?
Updated: Views / Replies:709 / 6
Created: by Corto Attachments:2

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Why are overnight sell stops risky?

  #1 (permalink)
Trading Apprentice
Portland, OR/USA
 
Futures Experience: Intermediate
Platform: TWS, TOS
Favorite Futures: Stock and index options
 
Posts: 14 since Jan 2015
Thanks: 1 given, 1 received

Why are overnight sell stops risky?

Going through Kaufmanís bible about trading (Trading Systems and Methods) I found a remark about stops. Unfortunately I cannot find it anymore, so I canít quote it here, but it said something like itís not a good idea to have a preset stop before the market opens, because it may be triggered at the opening just because itís sitting there.

I donít use any fancy trading platform and I canít see the orders queue, but I know many use platforms showing the queue. I wonder whether this is what he was talking about. For example Iím long in a stock which trades at around $10 with a range of about $0.25 and I place a sell stop at $9. Will my stop order be seen sitting in the queue at opening? And assuming there is no other order placed ahead of / higher than mine, will mine be executed?

Could anybody please provide some light on the execution sequence?

Regarding the book, I think it is just too much to digest; itís rather an encyclopedia, while I was hoping for a cook book with trading systems recipes. It may have valuable material that would be well suited for a conference, but I wonder if real traders ever go into those details. Of course there are some practical pieces of advice but they are scattered through the text and you need to browse almost all the material to make sure you donít miss a good one.

Thanks,
Corto

Reply With Quote
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Elite Member
Buenos Aires Argentina
 
Futures Experience: Advanced
Platform: NT, MT4, Sierra
Favorite Futures: S&P, Bonds, Crude, FX
 
Posts: 250 since Sep 2014
Thanks: 37 given, 239 received


Corto,

I haven't read that book before, but I'm assuming the book is primarily focused on day trading or swing trading rather than say building an investment position that isn't too concerned about 25 cent stop placements.

So let's assume for illustration purposes example you were trading Apple to the long side on Friday Feb 27th 2015 and you bought at $128.40 and you put a relatively wide day trading stop at $126. Notice how the price gapped down to $125.41 and then closed that gap. This is what we would consider a classic predatory stop hunt during low liquidity.

And yes, a predatory firm can see your pending limit sitting there, and worse, they know it's a novice retail account coming from Scottrade or TD Ameritrade.

Attached Thumbnails
Why are overnight sell stops risky?-j3og5w.png  
Reply With Quote
The following 2 users say Thank You to MacroNinja for this post:
 
  #4 (permalink)
Trading Apprentice
Portland, OR/USA
 
Futures Experience: Intermediate
Platform: TWS, TOS
Favorite Futures: Stock and index options
 
Posts: 14 since Jan 2015
Thanks: 1 given, 1 received

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

keep an eye on it instead of using stops?

Any guess why my Apple chart doesn't look like yours? I'm using stockcharts.com, I just like their charts.

Attached Thumbnails
Why are overnight sell stops risky?-aapl.jpg  

Last edited by Corto; March 4th, 2015 at 06:20 PM.
Reply With Quote
 
  #5 (permalink)
Elite Member
seoul, Korea
 
Futures Experience: Intermediate
Platform: Multicharts
Broker/Data: CQG, DTN IQfeed
Favorite Futures: YM 6E
 
treydog999's Avatar
 
Posts: 894 since Jul 2012
Thanks: 291 given, 1,006 received


Corto View Post
Going through Kaufmanís bible about trading (Trading Systems and Methods) I found a remark about stops. Unfortunately I cannot find it anymore, so I canít quote it here, but it said something like itís not a good idea to have a preset stop before the market opens, because it may be triggered at the opening just because itís sitting there.

I donít use any fancy trading platform and I canít see the orders queue, but I know many use platforms showing the queue. I wonder whether this is what he was talking about. For example Iím long in a stock which trades at around $10 with a range of about $0.25 and I place a sell stop at $9. Will my stop order be seen sitting in the queue at opening? And assuming there is no other order placed ahead of / higher than mine, will mine be executed?

Could anybody please provide some light on the execution sequence?

Regarding the book, I think it is just too much to digest; itís rather an encyclopedia, while I was hoping for a cook book with trading systems recipes. It may have valuable material that would be well suited for a conference, but I wonder if real traders ever go into those details. Of course there are some practical pieces of advice but they are scattered through the text and you need to browse almost all the material to make sure you donít miss a good one.

Thanks,
Corto

I can tell you that this book is fantastic. I have read both the old and new editions cover to cover. It is definitely applicable to making and developing profitable trading strategies.

Reply With Quote
The following user says Thank You to treydog999 for this post:
 
  #6 (permalink)
Vendor self-promotion
Cyprus
 
Futures Experience: Intermediate
Platform: Multicharts
Favorite Futures: ES
 
Posts: 68 since Jul 2013
Thanks: 15 given, 18 received


Corto View Post
Going through Kaufman’s bible about trading
Thanks,
Corto

There are no Bible's of trading. Trading is not religion. There are many different and even conflicting approaches. It depends on many factors. Do not rely on anyone's advice because it is based on their experience. Also most of what these books claim does not work nowadays. As far as stops, you must do what works for you and not what some author says it does or it doesn't. More losers can be attributed to authors than to markets.

Reply With Quote
 
  #7 (permalink)
Trading Apprentice
Portland, OR/USA
 
Futures Experience: Intermediate
Platform: TWS, TOS
Favorite Futures: Stock and index options
 
Posts: 14 since Jan 2015
Thanks: 1 given, 1 received


solotrader View Post
There are no Bible's of trading. Trading is not religion. There are many different and even conflicting approaches. It depends on many factors. Do not rely on anyone's advice because it is based on their experience. Also most of what these books claim does not work nowadays. As far as stops, you must do what works for you and not what some author says it does or it doesn't. More losers can be attributed to authors than to markets.

When I said Bible I said it because of it's size. Didn't mean it's the reference book. And I know they often conflict with each other. 13-15 years ago I bought maybe a dozen books and after going through them decided I have better paper weight options and donated them to a library.

Now I wanted to revisit some material and Kaufman's book looked like a good idea because it looked pretty comprehensive and the fact the author had a strong math education seemed to be a plus.

When I'll know what works for me I'll use that, but until then I thought I don't need to invent the wheel and could take a look at others' wheels for inspiration. And speaking about one's own experience, I pretty much understand now what MacroNinja said about stops, but this hasn't been my experience at all so far. All my stops have been executed at the said price or reasonably close, I can't complain, but knowing bad things can happen makes me think now.

Thanks for the replies,
Corto

Reply With Quote

Reply



futures io > > > Why are overnight sell stops risky?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
What is less risky on the ES? trendisyourfriend Traders Hideout 10 September 30th, 2013 11:44 AM
Margin requirements for buy & sell stops? LightWeight Commodities Futures Trading 2 January 31st, 2013 07:32 PM
Buy Stops / Sell Stop and ATM Strategies Baertrader NinjaTrader 9 August 21st, 2011 04:45 PM
Sell stops not filled cihde Traders Hideout 7 August 21st, 2011 02:57 PM
Stops, trailing and breakeven stops jonc NinjaTrader 4 November 9th, 2010 01:06 AM


All times are GMT -4. The time now is 12:51 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-11 in 0.12 seconds with 20 queries on phoenix via your IP 107.20.115.174