Does IB or any Broker Offer Risk Controls for Traders?

Discussion in 'Retail Brokers' started by chewbacca, Mar 17, 2006.

  1. Does any broker allow traders to set risk controls on their account as in: if you loss a certain amount per day you get cut off (can't place any more trades), or you can take positions only up to a certain level (say $50000 in stocks or 500 shares max or 4 contracts max in futures). I know Genesis has this but does any other broker have these settings that the trader has control over.
  2. You are responsible for your own risk control so you have to cut yourself off. As for number of shares, Reg T margin will restrict how much you can trade and the margin requirements will lock up your account and liquidate if you take on losses that will exceed your margin.
  3. I posted this in the IB suggestions thread:

    Traders don't have risk managers like hedge funds so how about allowing traders to control risk by allowing them to:

    limit the # of shares or contracts they can trade

    freeze the account (no more trades can be placed other than closing current positions) after the account losses a certain amount of money

    prevent them from averaging down
  4. I could be wrong, but I thought ButtonTrader has built in risk controls. Check with Hoi, he'll have the answers.
  5. Thanks, I just looked up ButtonTrader and they do allow traders to pre-set both single trade and daily loss limits...which is nice but there is no mention of other ways to manage risk though.
  6. Hoi


    Oh..Yes.. it does a lot more than that (see screenshot). You can set your positions to enter to a certain level ($50,000 in stocks and $10,000 in Futures and/or 10 Futures, or 20 Trades or what ever…).
    It also can close all Stocks and/or Forex, etc per SecurityType when they pass a day-loss level or all positions can be close. I think it can do more than you need :)
  7. I think Shoney allows this as an option for the retail equity traders ...

    I used to have on occasion this problem and still can get too large for my P+L
    ( too much size ) but when I see myself doing this
    nowadays I either hedge as best I can until I can unwind favorably my positions or I just bite the bullet and reduce reduce reduce ...

  8. I've asked several times in the past for risk management options exactly as you specified, thinking that they would provide the exact solution for each of my "problems".

    But trust me, it is better (if perhaps more costly in the short run) that you try to get to the point where risk control becomes internal and instinctive, rather than an externally forced issue. Rules implemented to "eliminate" bad habits may in fact just worsen the situation; if your problem is lack of discipline in the first place, how will being told you can now do whatever you like because of system safeguards help the issue? Figure out why you are not honoring your own limits in the first place, then convince yourself of the logical counter-arguments. After that it becomes a matter of time (probably longer than you think), habit and repetition, building your mental muscles to detect and react quickly in that department whenever the occasion arises.
    Pretty much like that :)