Day Trading & Forex Forum

Crasho

Hey guys, I'm currently using a demo SB account with Paddy Power and plan on doing so for a long while yet to gain experience etc etc.

I understand there is no definitive answer for this question,and obviously experience will teach me but as a rough guide what are the chances of being caught out to the point of no return? When I feel I'm ready to play the market with real money I'll most likely put something in £2000 or so. Now lets say I place a stop loss that will limit my maximum loss on a given bet to £200. What are the chances of the stop loss being missed (for whatever reason i.e natural disaster) and me ending up paying £3000-4000 in losses. I know you guys cant predict natural disasters (although if you can, please pm ) but from your experience, how often does this type of situation occur? (Based on higher profile companies for arguments sake i.e Glaxo, Google etc)

Many thanks

ofurbaldur

If you are trading with a spreadbetting company you can buy a stop protection. Then you know your maximum loss guranteed by the spread better, cost money, gets expsensive if you trade alot.

Some forex brokers say you will never loose more than what is in ur account.

If you are trading in the real market, you will only be able to get out when the markets lets u, so on a margin product like futures u can have massive losses on a single position

Good luck and play safe

Baldur

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Be conservative on your capital until you have mastered trading. Don't add to loosers.

si1503

If you place a stop loss and providing you are trading established companies unlikely to just go bust overnight then I would imagine the chance of what you imply happening is pretty close to zero.

TheBramble

Crasho (bit pessimistic, but there you go…), risking 10% of your capital per trade will take you out of the game within a very short period. Regardless of your decision to use an SB. 1% would be a far more ‘doable’ level to manage.

You can ‘buy’ guaranteed stops with some SBs, but their guarantee only operates within fairly relaxed market action. If the markets get hit bad, and they spike, your SB will wriggle out of your ‘guaranteed’ stop – absolutely no question.

This of course begs the question of value. Your SB will already be loading a reasonable (for them) safety margin to ensure they get your money even if you get it right most of the time.

Hoggums

It all depends on what you are trading. If you are concerned about gaps then getting a limited risk account is definitely worth it. I would never SB individual shares without limited risk because they can gap by huge amounts overnight.

However if you trade indices or forex then it is far less likely to happen. Just make sure you get a broker that operates 24hrs. I have had problems with Cap spreads with gapping because many of their instruments are not tradable 24hrs a day.

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Hoggums

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Outside of a dog, a book is a man's best friend,
inside of a dog, it's too dark to read. -- G Marx.

Masquerade

Not entirely true. I had a position with IG this morning with guaranteed stop and it gapped below my stop - but I got filled at my stop. If they're not meeting the guaranteed stop then leave if guaranteed is something important to you.

TheBramble

Not entirely true in this one instance perhaps. There's a difference between a gap and spike. Trust me. Not your SB...LOL.

Masquerade

It's IG - they'll stick to guaranteed; i'm fairly confident. I don't use them much, but do you know of contrary examples?