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My friend thinks the exchanges also go down when assets "flash-crash", because it means normal users can get in to sell their assets. And when they can't get in
by pcf 9y ago
My friend thinks the exchanges also go down when assets "flash-crash", because it means normal users can get in to sell their assets. And when they can't get in, they also can't cancel their stop-loss orders, so it means a TON of assets are available to buy cheaply (by the exchange and/or certain VIP users/collaborators) as the value goes down. Then these are bought up, and the price quickly increases again, before the exchanges slowly come online again.
Therefore he thinks the people exchanges are either part of the "flash-crashes" (and buy up assets themselves, because they know exactly where most of the stop-loss orders are placed), or they get kickbacks from the whales manipulating the market, by giving them access to the database with all the limit and stop-loss orders.
- deleted 9y ago[deleted]
- yueq 9y agowhy would they cancel the stop orders when the sole purpose for stop order is to protect profit?
- twohearted 9y agoThis has always been a worry in the traditional stock market. With a stop loss order you're basically creating a "secret" order to sell at below market value. Anyone who knows about it has a direct incentive to profit from it. Stop-losses are very important in investing but I'd recommend always executing them manually at market rate. Set a price alert to notify you. Of course if the exchanges are down you're sol, but if BTC is on a bullet train to $10 your exchange stop-loss probably won't fill at your price anyway.
- rsync 9y ago"Stop-losses are very important in investing but I'd recommend always executing them manually at market rate." No, no, no, no ... You do not ever want to insert a market order[1] ... the market can be manipulated and high frequency traders can buy/sell your public market order at an artificially low/high price. The answer to getting "stopped out" is not to insert a market order - it is to create a fill-or-kill at a specific price or other more specific order type ... [1] https://www.marketwatch.com/story/this-is-why-you-never-use-a-market-order-during-a-selloff-2015-08-28 https://www.marketwatch.com/story/this-is-why-you-never-use-...
- twohearted 9y agoStop loss means get out NOW to stop losses. Trying to finesse a nickel out of a trade at that point is a sucker's game. Getting "stopped out" is fine, it's part of investing. You need to stop your losses. I'm just saying don't put the order on the books for the exchange to pluck like a ripe berry.