Trailing Stops?

Discussion in 'Order Execution' started by GotherL, Jan 14, 2019.

  1. GotherL


    So I am kinda confused when using a trailing stop sell order should I set it on the bid, ask, mark, last, avg price or bid/ask? Those are the options in the ThinkorSwim paper trading platform.
    murray t turtle likes this.
  2. tommcginnis


    The flexibility is meant to conform to your mental image of the market.

    If your mind has the market turning on its mark-to-market, then that's how you should set up your trades, and your brackets. If your brain is focused on a down-turn, and you're worried about what will happen to market psychology if the bid breaches a certain price, then that's how you trigger your trade -- putting it at an average or a last will not do you too well. On the other hand, if you wish to weather a spike down, then placing your TS with an average would save you from spurious bids.

    So, what is your mental image of the market? Decide that, then configure your TS to match. (Each trade, each day, each TS.)
  3. lamden


    I've never thought about it like this. Would you say that trading strategies in general are heavily influenced by the individual trader's philosophy then?
    tommcginnis likes this.
  4. guru


    To make it simple, use “last”.

    If it’s a liquid stock, use “last”.
    If not very liquid, use “avg price”.

    Though this is just a starting point and you’d have to make own choices as you test and evolve your trading.
    And actually take advantage of paper trading while at it, by testing different options. You can even create multiple orders on the same stock.
    tommcginnis likes this.
  5. TommyR


    more fundamentally if you send an order, you are explicitly giving permission to a broker to fk with you whenever they want. i don't know about this stuff but i doubt they forward it straight into the lit exchange auction and keep re-cancelling and re-sending as it moves. good luck proving it was bid or ask after. while(1){Print("you can't leave orders with brokers");}
  6. TommyR


    i recommend at whatever speed they are happy with, waiting for their tradeable best bid/ask/size and then trading on it or not and see what they do. how you decide, they don't know. after all they should be ok with the price they sent you given all the delays. they technically should be at risk on prices unless they can consistenly show they were traded on in front of you (unlikely with everyone recieving equally 'slow or whatever' prices). less good is handing everything over to them whilst chatting about latency (unclear what that even means). lots of very slow broker price feeds please :)
  7. TommyR


    i get you are making this point by the way but for good order, you are long, so you are only interested in the bid for closing. im your broker and wasnt concentrating because i have very weak technology because i never invest in it so my throughput and latency is extremely low and obviously i can't make all those prices at the best of times. i made the price really wide for a nanosecond and sold your position to myself on my bid on a 10 wide bid offer. you'd say no.
  8. TommyR


    Question. There are these two things called a contract for difference and a spread bet. One you don't pay tax apparently but also if you go onto the fakenews websites the key very technical difference is in a cdf you have 'direct market access'. You can buy Amazon shares in 1usd notional with these things. I'm interested in who at the regulator signed off on this. If i was a fake broker i would want to keep all law suits firmly in the domain of 'i was misled over two years of dinners and strippers'. Good for brokers/beaurocrats/regulators. No one cares about a clown at Mt Gox and the regulators need to stop assuming they can judge what is suitable for a retail client. (they need help they think cyber security is about hiding your credit card, think whislteblowing will help the economy and couldn't decide whether it was a good idea to up the deposit insurance at banks from 30k-50k as the world melted in 2008. i need them to look at something for me)
  9. qlai


    Use "last". For stocks with large spread you will find that the bid will drop below your stop price only to trigger your order and go back up. Using "last" at least you will not be the only sucker (My execution was once actually the only one to make the low of the day ... Felt molested).
    tommcginnis likes this.
  10. lukepoga


    The only one to hit the low of the day. That’s quite an achievement!
    #10     Jan 15, 2019