Good point, nitro, Using stop loss orders without a limit is massively risky -- a "safety" measure that, paradoxically, can actually blow up one's account in seconds. On a slightly different note, why is everyone taking a Themis trading "whitepaper" so seriously? I wouldn't give their so-called "whitepapers" any more credence than a post to these forums. Are there other sources that confirm this story?
So what's the problem with manually working a stop loss limit order? If you're a market professional then you're supposed to be doing this full time and keeping a close eye on the markets so why not? Doesn't anyone else do that? An automated stop loss can result in the worst possible fills in my experience and discretion saves some money more often than not. I think the answer is to ban all automated trades, though I realize that might be hard but not impossible to enforce. Stop losses can be worked manually like in the old days. Markets will still dive and crash but not at such ridiculous speed, that exagerate the extremes.
Can you believe this? Imagine having an open trade and your commputer freezes up. You think the losses from the flash crash were bad. This is just the beggining, their trying to remove any volitility from the markets by making it to dangerous for the retail trader in the US. Does the SEC work for foreign GOVT's, because when this is applied it will push traders out of this country.It's like the GOVT owns a large trading firm and they are trying to kill the copition. Wow! I cant believe how easy it is to destroy capitalism.
It is also recommended that all automobiles be banned. I realize that might be hard but not impossible to enforce. Transportation can still be achieved on donkey rides like the olden days. We will still have occasional mule collisions but not at such ridiculous speed, that exagerate the extremes.
I don't understand the fuss in this thread at all..... Just emulate/simulate your Stop-order with a StopLimit-order. And set the Limit-price of this StopLimit-order as far away as you like it to be: 10 ticks, 100 or even 1000 (if that is the price you really want to sell). Then you will get your fill at the best price available in the book, just like a Stop-order would.
Stop loss market orders are a horrible option for most market participants. Use a stop-limit, pay closer attention, or limit size to where catastrophes can't take you out.
what difference does a market order or limit order.. if somebody wants to exit and any price. if the market is that illiquid than exit. limit orders don't get filled and not obligated to get filled..market orders must be filled. and i don't need the SEC telling me i can't sell the bid or can't buy the ask..that is a market order..isn't it. the guy on the bid wants to buy the bid and the guy on ask wants to sell the ask...trade. if nobody wants to be market maker than you don't need market makers than.