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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 $
- Finnucane 9y agoDesign a cryptocurrency to have stable value, not speculative-asset value.
- chollida1 9y agoUnfortunately it looks like you had a perfect storm of 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 https://news.ycombinator.com/item?id=13847775#13848698 https://news.ycombinator.com/item?id=10129355 https://news.ycombinator.com/item?id=10129355 https://news.ycombinator.com/item?id=12912781#12913058 https://news.ycombinator.com/item?id=12912781#12913058
- dragonwriter 9y agoStop loss orders aren't “like” market orders, they are market orders with a triggering event.
- chollida1 9y ago> Stop loss orders aren't “like” market orders, they are market orders with a triggering event. 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?
- dragonwriter 9y ago> 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. 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.
- graham1776 9y agoChris-Follow your comments religiously. You always harp on stop loss orders, can you point towards the "right" kind of orders to make instead? Thanks.
- unstatusthequo 9y agoPrevent? I wish I had the foresight to have had buy orders in at $0.11 on the rise!
- spcelzrd 9y agoOther markets like NYSE and NASDAQ have circuit breakers. If an index declines by a certain amount, all trading is halted so people can think and sort out their positions. This doesn't stop a single stock from flash crashing, but transactions during a flash crash are frequently reversed.
- meric 9y agoWhen a large market order come in, if it looks like it will move the price by more than a certain percentage, warn the seller there isn't enough depth to support his order. And circuit breakers.
- Draco_Au 9y agoThe richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons – and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now, you're not naive enough to think we're living in a democracy, are you, Buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around, pal, I've still got a lot to teach you.