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jeremyjohnolson

Stop Orders - Mental or Actual

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So I was just wondering what peoples' experience has been with placing stop orders.  I have heard it said by some that you should never send actual stop loss orders to the market because the market makers will somehow manipulate the price to go down to the level of your stop trigger and then the price will continue on upward after you get stopped out (assuming you had a long position).  So the remedy, they say, is to never place an actual stop loss order, but instead to just have a mental stop loss price in your head and manually hit the bid when/if the price falls to that level.  I would like to hear from people with experience whether they think there is any truth to this or not.

I would like to send stop loss orders to the  market at the same time I buy the stock so I do not have to think about it anymore if the price goes against me.  However, if doing so is going to be like a magnet to suck the price down to that level, then of course I do not want to do it.  I do not have much experience trading,  only about 4-5 months of limited trading just in the mornings before I have to go to work.  I live on the west coast in Arizona so I trade from market open for about an hour or so, unless it's daylight savings time of the year, then I get to trade for 2 hours because AZ does not adjust clocks for daylight savings time.  Anyway, I am not sure my opinion matters much due to my limited amount of  real world experience in trading, but it seems to me that if I were taking a relatively large position (meaning relative to all other outstanding positions in the market at that time on that stock), then maybe, possibly, somehow somebody could manipulate the price down to run my stop (not sure how they would do that and still come out on top, but there is still a lot I do not know about how the markets work behind the scenes).  On the other hand, when I am taking relatively meaningless positions, I mean not small positions to me, but small in the grand scheme of things, like 1,000 shares on a stock with volume in the millions, I seriously doubt my puny share size would have any impact on the price at all...but maybe I am wrong, I don't know.  Your thoughts on this matter are much appreciated.  I am trying to decide if I should place actual stop loss orders or just keep them as mental stop loss orders in my head and not show my hand to the market makers, if it would make a difference.

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