Guaranteed stop loss

This is a discussion on Guaranteed stop loss within the First Steps forums, part of the Reception category; Hiya guys, I'm new to the forum, as well as trading. I've been trying out different approaches using a couple ...

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Old Sep 24, 2017, 12:33pm   #1
 
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Joined Sep 2017
Guaranteed stop loss

Hiya guys,

I'm new to the forum, as well as trading.
I've been trying out different approaches using a couple of demo accounts for the past couple of months. I've had modest success, I feel, but need to test more to ensure it wasn't blind luck. Fx trading primarily, 1hr and 4hr charts.

I've been using demo accounts from plus500 as well as mt5 demo account for fxpro.
I probably prefer fxpro if I'm honest.

I have a lot more learning and reading (and practicing) to do before going live, but I would appreciate some advice/opinions...

Apologies if asked before, but I've read a little about guarantee stop losses to protect from slippage etc (seem to come at a premium).

1. Would you recommend using them or do you have experience of using guaranteed stop losses?
2. Very few brokers offer them, any reason why this is? Do you know any brokers which use them that you could recommend?
3. If I'm exploring an avenue that I should worry less about, please tell me, and if that's the case - are there any brokers in particular you would recommend for a newbie, and why? Any brokers a new be should steer clear of?

I appreciate your thoughts.
DrVoles is offline   Reply With Quote
Old Oct 24, 2017, 6:21pm   #2
 
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Joined Dec 2008
Best of luck to you friend.


What is your strategy - short term, scalping, intraday, etc? Trading live is nothing like practice. Everything is different. Cheers.

HT
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Old Nov 16, 2017, 1:03pm   #3
 
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The only thing I can suggest is read up on reviews of forex brokers. and like hammertime said, it also depends on your preferred trading strategy.
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Old Nov 16, 2017, 8:31pm   #4
Joined Jul 2004
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Originally Posted by DrVoles View Post
Hiya guys,




2. Very few brokers offer them, any reason why this is? Do you know any brokers which use them that you could recommend?


I appreciate your thoughts.
some brokers claims to offer "negative balance protection"

but that stop is at zero balance

a guaranteed stop like the ones that IG and CMC offers you can use almost as a non guaranteed stop
kalott is offline   Reply With Quote
Old Nov 17, 2017, 2:53am   #5
Joined Mar 2017
Welcome to the community mate. Which trading are you following right now?
Raynold is offline   Reply With Quote
Old Nov 17, 2017, 7:16am   #6
Joined Feb 2002
Guaranteed stops are not widely used - expensive and usually unnecessary.

That said, if in a high risk situation like an individual equity just before earnings announcement, could be worth the cost.

But this is just my thought - it would be interesting to hear if anyone deliberately targets these announcements as a strategy and if they use GS as insurance.
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Old Nov 17, 2017, 7:34am   #7
Joined May 2012
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Originally Posted by DrVoles View Post
I've read a little about guarantee stop losses to protect from slippage etc (seem to come at a premium).
A guaranteed stop loss is what is implied in the wording. It does come at a premium because you are buying insurance. Whether it is legally enforceable is probably unknown because you will have to read the fine print of the contract in special event like SNB where some brokers claim force majeure. Normally I suppose it would be a non issue.

Quote:
Originally Posted by DrVoles View Post
1. Would you recommend using them or do you have experience of using guaranteed stop losses?
Whether you need to buy insurance or not depends on whether you have an insurable interest and that varies between individuals and their circumstance. I have used it only once in 17 years but that single event was only to test out the process out of curiosity. Once you invoke the guaranteed stop it is only valid at the price level set. Should you move your stop, the guarantee disappears with it unless you buy another guaranteed stop.

Quote:
Originally Posted by DrVoles View Post
2. Very few brokers offer them, any reason why this is? Do you know any brokers which use them that you could recommend?
My single experience was with CMC but that was with stocks.

Quote:
Originally Posted by DrVoles View Post
3. If I'm exploring an avenue that I should worry less about, please tell me, and if that's the case - are there any brokers in particular you would recommend for a newbie, and why? Any brokers a new be should steer clear of?
Since you are starting out, you have a long list of things you need to learn about risk and money management. Guaranteed stop is way down the list.
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Old Nov 17, 2017, 7:57am   #8
 
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DrVoles started this thread
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Originally Posted by Brumby View Post
A guaranteed stop loss is what is implied in the wording. It does come at a premium because you are buying insurance. Whether it is legally enforceable is probably unknown because you will have to read the fine print of the contract in special event like SNB where some brokers claim force majeure. Normally I suppose it would be a non issue.


Whether you need to buy insurance or not depends on whether you have an insurable interest and that varies between individuals and their circumstance. I have used it only once in 17 years but that single event was only to test out the process out of curiosity. Once you invoke the guaranteed stop it is only valid at the price level set. Should you move your stop, the guarantee disappears with it unless you buy another guaranteed stop.


My single experience was with CMC but that was with stocks.


Since you are starting out, you have a long list of things you need to learn about risk and money management. Guaranteed stop is way down the list.


Very useful guys. Thanks for all your help.
I posted this when I knew far less than I know now, and there's still a lot to learn.
Happy trading guys.
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