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mcteague

Registered: May 2012
Posts: 21

10-22-12 06:28 PM

How and when do gaps occur in the ES?
One might think that you could enter a position and then attach a trailing stop before going to sleep. Recognizing some slipage, you would expect your stop to be filled within 1point.

I am saying this because it trades almost 24 hours, so gaps should be rare?
Is this just a horrible mistake that can only end in ruin?
And is it generally better to use trailing stops or trailing limit stops for the emini ES?

Thanks for any replies

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feng456

Registered: May 2010
Posts: 266

10-22-12 06:46 PM

Gaps do occur though they are rare...no more than 5 times a year off the top of my head. I'm sure you could pull up some historical data and look through it yourself. Keep in mind the ES isn't traded on weekends (well a good chunk of it) so that's where many gaps will occur (Sunday afternoon open).

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mcteague

Registered: May 2012
Posts: 21

10-22-12 06:58 PM

Thanks
I just want to add that I am not necessarally recommending the rip van winkle technique of emini S&P trading. Only asking about how and when gaps occur

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Handle123

Registered: Aug 2007
Posts: 1037

10-22-12 07:08 PM

Unless I have 10pts of profit in ES/S&P500 futures, and I just entered on the trade in past 1-3 days, I would have some options bought for over the weekend. Anything can happen and I rather have some kind of hedge, otherwise one is just gambling.

I don't recall the size of the gap when markets reopened after 9-11.

I recall long ago I got caught in a limit down move for three days in diff market, cost me $110k, not saying the indexes could do this, but anything is a possibility.

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oldtime

Registered: Jun 2011
Posts: 7334

10-22-12 07:30 PM

never saw the point in stop limits

maybe if you're sitting there watching it

but if you're sleeping, all you know is you want out

that's not a time to be quibbling over a couple of ticks

if anybody can make a case for stop limits I would like to hear it

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ammo

Registered: Feb 2007
Posts: 18258

10-22-12 08:45 PM

with the economy in it's current state the odds of the spx opening 20 pts higher is unlikely,but if it did, it would be big, i use a 20 point stop to the upside,along the same lines,the likelihood of it opening down 20 is much stronger, so just don't go home naked short

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