 Gold Customer
Joined: 3/28/2005
Posts: 31
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I've been trading for almost 25 years and I've never had this happen to me before. I entered today's trading with a resting sell stop on a particular nasdaq stock at $9.81. The lowest print was $9.86, yet I received a notice that my stop had been elected and filled at $9.86. Naturally the stock rallied smartly from there. I called the brokerage to find out what was going on, and was told that even though the stock did not trade that low, there was a brief instant where the highest bid was $9.79 and that was enough to trigger the stop. Does anyone know if this is correct? It sounds pretty bogus to me.
Beansintheteens
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Gold Customer
Joined: 3/28/2005
Posts: 31
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Registered User
Joined: 10/7/2004
Posts: 2,126
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You have been trading 25 yrs and you have never seen this? Where have you been trading?
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Gold Customer
Joined: 3/28/2005
Posts: 31
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Maybe I've just been lucky up till now, but I,ve never seen any definition anywhere, and neither have you I'll bet, of a stop order that doesn't say that a stop order isn't elected until the market actually trades at or beyond the stop.
Beansintheteens
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Registered User
Joined: 12/31/2005
Posts: 2,499
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jlsmith,
You will have to excuse bigblock. He is the resident jerk whose first instinct is to be condescending, followed by dismissive, then antagonistic, with a very occasional informative tidbit. But don’t expect any direct answers from him and don’t let his response scare you away.
There are knowledgeable and polite posters. He just doesn’t happen to be one.
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Registered User
Joined: 10/7/2004
Posts: 2,126
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QUOTE (jlsmith) Maybe I've just been lucky up till now, but I,ve never seen any definition anywhere, and neither have you I'll bet, of a stop order that doesn't say that a stop order isn't elected until the market actually trades at or beyond the stop.
Beansintheteens
Lucky for 25 yrs - that is a lot of luck. You go ahead and take it out with your brokearage and the market maker. You will just be wasting your time.
By the way, minute charts don't show everything, NOt ever tick Charts.
Were you looking at Level III when this happened? Even if you were - How are you going to proof. Were you recording Level III activity?
Like I said - you will be wasting your time.
Move on - this sort of thing happens more often than not. You couldn't possible be trading for even 1 month without this happening. Heck not even a week.
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Gold Customer
Joined: 3/28/2005
Posts: 31
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Level III has nothing to do with it. The broker checked time and sales and admitted that the stock never traded down to my stop. The fact remains that in 25 years, I have never had a stop elected by anything other than an actual trade occuring at or beyond my stop. Even on the New York Mercantile Exchange, which is really a nest of vipers, I've never had this happen. In any case I'm still looking for an answer to my question, to wit: what is it that triggers a stop order?
Beansintheteens
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Registered User
Joined: 10/7/2004
Posts: 264
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Jl,
Check your broker's trading platform. Some allow you to set how you want your stop to trigger, ie; based on bid/ask or actual trade. I would want an actual trade, maybe two at my stop price.
This is why I have chosen to use stop on close. Too many wipsaws at my stop prices.
Good luck.
"Buy low. Sell high. Fear, that's the other guys problem." Winthorp.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hi jl,I understand your frustration - the same exact thing to meanout 2 years back. Had my stop set. Price traded all the way down but never touched. I was very pleased until I got home and discovered the stop had been triggered and - just like you - price rallied without me. I was very upset - called the broker and received the same answer. Now I view stops as a general protection zone and know the bid can trigger them. Price has gone through stops and kept on going as many times as they have reversed. They're worse case senerios - most of the time I close without them anyway. I feel for you though - certainly frustrating.David John Hall
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Registered User
Joined: 10/7/2004
Posts: 2,181
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JL;
Although I really wish Bigblock would learn to just communicate without his prideful scolding, I have to agree with him. You have indeed been very lucky if this is the first time for you. And unless you are talking about have lost something in the high 5 figures, you probably are going to best spend your time by moving on.
Also, Golfman's comment is a good one, I was thinking the same thing. I use IB; they allow quite a few options on how you want the trade to be triggered. Yours might be on bid/ask, this would certainly explain the event.
I have my stops set to trigger on a double close ie. two trades have to close at my stop before mine can be triggered. I also use conditiional, which I wouldn't think of not using now that I know about it. For those not aware, a conditional order holds your limit, stop limit or market order at your brokerage until the market meets the conditions, then submits it to the market. This way, people with Level II or III can't see your order and snag it just before a reversal, etc.
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Registered User
Joined: 2/13/2005
Posts: 368
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JL,
Don't take that crap from your trading firm. Tell them that you are filing an SEC complaint, that usually gets their attention. It is actually quite easy to do. Go to the SEC website
http://www dot sec dot gov/complaint/selectconduct.shtml
and file a complaint. I have done this several times in my 25 years of trading and the firm has resolved the mischief every time. They hate having the SEC snooping around.
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Registered User
Joined: 10/7/2004
Posts: 2,126
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Look this is an easy thing to see, but dealing with it regardless of what others have said will be a waste of your time.
Level III shows manipulation - the price could have been printed there, but you would have to be looking at it or recording. And anyways - Level III doesn't garantie much, but that is why I mentioned initially - that is where games are played.
Is your broker correct? - Perhaps. Even when you trade Tick charts - a lot of things can happen between the ticks gets printed. Is he correct I don't know - but they could be.
If you are trading minute charts - then A LOT can happen between minute candles.
Second, the only place you cannot be told a lie is at the TOS. Find the raw data for that day, and look at the time of your fill. Confirm whether it could had happened or not.
And again, you will wasting your time trying to take this to the SEC or your broker - unless your losses are in the 100's of thousands. Even then is there is a print on the TOS for that price - you would be out of lock. To be serious about this you would need a lawyer.
So like I said - move on.
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Registered User
Joined: 2/29/2008
Posts: 17
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QUOTE (jlsmith) Maybe I've just been lucky up till now, but I,ve never seen any definition anywhere, and neither have you I'll bet, of a stop order that doesn't say that a stop order isn't elected until the market actually trades at or beyond the stop.
Beansintheteens
Look, if theres anybody who knows about being hosed, its bigblock.
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Registered User
Joined: 2/21/2007
Posts: 797
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BIG BLOCK KNOWS ALL
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Registered User
Joined: 10/7/2004
Posts: 2,126
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Hey jjames isn't that a shame that you must hide behind that sheet.
Thanks for the complement. The truth is that we all get hosed. Those who claimed they have traded for 25 yr without being hosed are claiming AN UNICORN. Your favorite animal.
I get hosed, but I hose a lot more than I get hosed - that is the difference.
Thanks for the complements. As a professional at the intraday level for the last 11 yrs I think I have seem about all there is to see. Two main bears on my back, and still pulling like a Saleen off the line.
What you got a 38? About enough to hunt some flies.
By the way, seems Apsll has reincarnated in a few different forms - go wonders for the 5 or 6th good bye - is that what it is - I lost count.
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Gold Customer
Joined: 3/28/2005
Posts: 31
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Well I certainly have set off some fireworks here. My only purpose was to see if anyone could tell me precisely what it is that's supposed to trigger a stop loss. I don't believe I implied some sort of impending kerfuffle with my bucket shop. Mister Block seems to have drawn that inference from the lumeniferous aether. But I guess the strain of swinging a 500-lot in T-Bonds would make anyone a bit edgy. And what's with the picture of Antiochus Epiphanes, anyway.
As for those of you without insecurity issues, thanks much for the replies.
Beansintheteens.
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Registered User
Joined: 2/21/2007
Posts: 797
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It's like rich guys driving small fast cars to impress the girls. You know what they're short on.
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Registered User
Joined: 10/7/2004
Posts: 2,126
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QUOTE (jlsmith) Well I certainly have set off some fireworks here. My only purpose was to see if anyone could tell me precisely what it is that's supposed to trigger a stop loss. I don't believe I implied some sort of impending kerfuffle with my bucket shop. Mister Block seems to have drawn that inference from the lumeniferous aether. But I guess the strain of swinging a 500-lot in T-Bonds would make anyone a bit edgy. And what's with the picture of Antiochus Epiphanes, anyway.
As for those of you without insecurity issues, thanks much for the replies.
Beansintheteens.
What triggers a stop loss? Let me think - Sun eclipse -no no no - moon eclipse. Not sure, but it is one of the two. Is it clear now?
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Gold Customer
Joined: 3/28/2005
Posts: 31
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If memory serves, the lunar eclipses tend to be associated with major turning points in the live cattle market. It must be the solar eclipse that triggers the stops.
Thanks for clearing that up.
To jjames and johnic I would just say this: Thanks for the replies and remember that a wise man once said " there are those you can hope to persuade, and others you can merely hope to outlive."
regards,
Beans-in-the-teens
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Registered User
Joined: 2/21/2007
Posts: 797
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I wonder if there are any psychoanalists who are TC members. Maybe we could get an analysis of Big Block. But there is also the possibility that such a feat would be totally impossible.
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Gold Customer
Joined: 1/18/2008
Posts: 209
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Hi,
I have been stopped out with the low price of the day 19 cents above my stop point. and as usual, the stock rallied hard without me. very frustrating.
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Gold Customer
Joined: 3/28/2005
Posts: 31
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Actually, I wasn't hurt by the fill I got on this particular trade, since I would have been stopped out a day or two later, probably at a worse price. The biggest problem with this is that it makes it difficult to test any mechanical trading system that relies on stop orders for either entry or exit, since you can't look at a chart and determine whether a stop would have been elected. That's what really frosts me about this whole thing. I did a google search on stop orders and could not find any definition that didn't say that a stop is triggered by price equalling or surpassing the stop price. That's either true or it isn't.
I think Golfman had the best answer, which is to find a broker that allows you to specify that a stop will only be triggered by an actual trade.
Beans-in-the-teens
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Registered User
Joined: 10/7/2004
Posts: 2,181
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QUOTE (jlsmith) I did a google search on stop orders and could not find any definition that didn't say that a stop is triggered by price equalling or surpassing the stop price. That's either true or it isn't.
Well, it isn't. Or, at least, so far as I understand. It definitely appears that IB offers best bid/ask as one type of trigger.
Their default is double-close but you can select the other.
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