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>>>Any trader should know that the market can move suddenly and powerfully,
>>>who cares why. People should expect the unexpected, and protect
>>>themselves accordingly. If the shorts had some kind of protective stops
>>>on the books they could have survived.
>
>>That is the real concern with the Greenspan announcement. For daytraders,
>>there really was no way to protect themselves. I have no idea how much
>>paper got filled on the way up after the announcement, but there is a
>>pretty good chance that regardless of where a stop was placed, that it
>>would have been filled at the high of the spike. That is a scary thought.
>>This sort of move happens very infrequently, but is a good example of
>>where stops can do very little in controlling risk. In fact, in this case,
>>it would have been better to not have a stop, and wait for the mkt to
>>stabilize a little- not an easy thing to do under pressure, but something
>>to keep in the back of your mind if something like this ever happens
>>again.
>
I guess there's supposed to be a market but there's no telling what price.
So your survival is not guaranteed! Makes you wonder why they didn't just
jump it 50 points right off the bat. A side question: Are the stops at
whatever price executed in the same order as they were entered? Like would
a GTC from 3 weeks ago be first?
Maybe I know what you mean, in my experience you're better off with a
system where the stops are so far away you might as well not have them
(takes a little getting used to). And then play for the bigger swings.
Wasn't there some guy in the Market Wizards book who said contrary to
popular opinion you can usually get a better price on a losing trade if you
wait a bit? Now that really sounds crazy.
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