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The real problem is that your "stop loss" is a standing order to sell, at any price, if the price of your asset falls below some threshold. That is fundamentall
by pash 14y ago
The real problem is that your "stop loss" is a standing order to sell, at any price, if the price of your asset falls below some threshold. That is fundamentally a bad idea, and it's just this sort of trading behavior that creates liquidity crises.
- damoncali 14y agoNo, the real problem is that one person's program broke and caused real losses for other people who were acting rationally. If you must account for a non-zero chance that some geek's algorithm will go totally batshit and lose you a bunch of money in unpredictable ways, there is a huge problem at the very core of the marketplace.