What would you have done to prevent the ETHereum flash crash on Coinbase yday?
Stop using stop orders?
limit orders only?
check orders above >1mn $
limit orders only?
check orders above >1mn $
1) Large order sent to market
2) Exchanges with a serious lack of liquidity
3) stop loss orders making things worse.
Everyone has their personal pet peeves, mine is stop loss orders. It's one of the 3 things that amateurs tend to use with out any understanding of markets. The other two being use of margin, probably doesn't need any explanation, and trading currencies/currency pairs.
In today's markets, stop loss orders are like market orders........ 99.99% of the time only people who don't know what they are doing use them.
https://news.ycombinator.com/item?id=13847775#13848698
A few things about this sentence are wrong, don't worry, markets can be tough to figure out:)
1) By your very sentence you agree they are the same but different?????
2) I never said stop loss orders behaved as market orders, I said they were alike in that most people shouldn't be using them.
4) There isn't 1 type of stop loss.
There is stop loss limit, in which the user specifies a price that the stop loss is triggered and then a limit price that the order is active to. This is sometimes called a stop limit order.
Or stop loss market in which only one price is given, this is the price at which the order translates into a market order. This is sometimes called a stop market order.
Does this clear things up?
Every professionally-published source I've seen—whether documentation for particular exchanges supported order types, discussion of the relative merits and caveats of given order types in trading-oriented outlets, etc. has consistently referred to this as “stop limit” and reserved “stop loss” for an order in which a market order is triggered by the stop price.
It looks like the other points of apparent disagreement are connected to this different understanding of the terminology.
And circuit breakers.