Chance of a big loss

[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]

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

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

 

[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]

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

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.

 

[Masquerade]

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.

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?

 

[TheBramble]

Don't use SBs so can't provide personal examples. But a quick search on this site alone will provide you with sufficient confirmation.

Plus, as an IG man yourself, check out the T&C on guaranteed stops - any 'get out' provisios? LOL. 'Fairly confident' wouldn't be something I'd be willing to stake my trading career on.

 

[Crasho]

Firstly thanks all for your help. I'm using Paddy Power as it's the only established 'respectable' spread better I know of with money behind them (although please feel free to offer me otherwise). When you say a limited risk account, what do you mean? Whatever it is, I dont believe Paddy offer it. The stop losses are never guaranteed with Paddy Power.

 

[tar]

Don't use SBs so can't provide personal examples. But a quick search on this site alone will provide you with sufficient confirmation.

Plus, as an IG man yourself, check out the T&C on guaranteed stops - any 'get out' provisios? LOL. 'Fairly confident' wouldn't be something I'd be willing to stake my trading career on.

u r talking about normal stop loss , garanteed stop loss is garanteed even if 9/11 repeated itself , and because it is garanteed there is premium u should pay and there is minimum destance depends on the instrument .

 

[cryten]

Firstly thanks all for your help. I'm using Paddy Power as it's the only established 'respectable' spread better I know of with money behind them (although please feel free to offer me otherwise). When you say a limited risk account, what do you mean? Whatever it is, I dont believe Paddy offer it. The stop losses are never guaranteed with Paddy Power.

IG Index imo is the daddy of sb companies, been around since 1974 and have the best reputation from what I could find when deciding on a SB company.

 

[TheBramble]

u r talking about normal stop loss , garanteed stop loss is garanteed even if 9/11 repeated itself , and because it is garanteed there is premium u should pay and there is minimum destance depends on the instrument .

Thanks, but I wasn't talking about a 'normal stop loss'. If you'll read my posts again you'll note I refer specifically to 'guaranteed' stop losses.

The premium they charge for this 'service' does not apply under all market conditions. It almost certainly would not apply under anything similar to 9/11.

Anyhoo...enough of this SB 'guaranteed' stop loss malarky, if you're dumb enough to go for it (or be forced to go for it) you deserve to find out the hard way just how hard and fast the 'guarantee' is. LOL.

 

[TheBramble]

IG Index imo is the daddy of sb companies, been around since 1974 and have the best reputation from what I could find when deciding on a SB company.

Well yes, I'm sure you're right.

But it's a bit last asking who you want to be robbed by.

 

[Crasho]

Something tells me you really don't like SB Bramble! I'm really just trying to learn the market a little better at the moment, but I am looking at sb at the moment. I'd appreciate any points you could provide as to why the chances of suceeding with SB are slim (Other than the bookies beating most people ofc)!

Thanks.

 

[Masquerade]

Don't use SBs so can't provide personal examples. But a quick search on this site alone will provide you with sufficient confirmation.

Plus, as an IG man yourself, check out the T&C on guaranteed stops - any 'get out' provisios? LOL. 'Fairly confident' wouldn't be something I'd be willing to stake my trading career on.

Maybe, but general sentiment is that IG is in a different league to most other platforms.

I'm no IG man btw - it's just i had a position with them this morning and had no problems getting out at my stop despite gapping the market. I'd do it again as i'm happy enough to trade with them with risky trades like that.

Back to the original question - I don't think of Paddy power when i think of financial betting. I don't know what the spreads are, but if you do a search for SB plaforms i'm sure you'll find enough help. I'd say stick to the main ones like IG, Capital Spreads, CMC and any others i've left out and just see what people think of them (because my experience with them is limited.)

 

[nick 462]

I G guaranteed stops do what they say. I currently have to use them as part of their 'trade sense' starter package I'm using at the moment.

 

[TheBramble]

Something tells me you really don't like SB Bramble! I'm really just trying to learn the market a little better at the moment, but I am looking at sb at the moment. I'd appreciate any points you could provide as to why the chances of suceeding with SB are slim (Other than the bookies beating most people ofc)!
.

Sure mate, I understand. Which is why I addressed your 10% risk per trade issue first. Far more important than SBing per se.

I do think SBs are the worst way to enter the financial markets and unfortunately, their business model is designed precisely to attract those new to trading and with relatively little trading capital.

As for why your chances are slimmer, please, just do a search.

Some traders apparently do make profits, but they are few. There are so many issues regarding potential stop hunting, spike producing, front-running, bias and skew on underlying – far too many stories for it to be simply newbies just getting it wrong. You don’t get the same level of ‘antics’ reported from other trading interface suppliers.

 

[TheBramble]

I G guaranteed stops do what they say. I currently have to use them as part of their 'trade sense' starter package I'm using at the moment.

So, you've experienced a 500+ point move against you and your guaranteed stops have been honoured?

Have your guaranteed stops ever been tested in a truly vibrant market? I don't think so.

Please check out the IG small print. Is there no exclusion whatsoever for guaranteed stops? No basis at al under which their guarantee fails to hold?

Anyone from IG able or willing to comment?

 

[FXSCALPER2]

So, you've experienced a 500+ point move against you and your guaranteed stops have been honoured?

Have your guaranteed stops ever been tested in a truly vibrant market? I don't think so.

Please check out the IG small print. Is there no exclusion whatsoever for guaranteed stops? No basis at al under which their guarantee fails to hold?

Anyone from IG able or willing to comment?

It makes sense for them to honour the guaranteed stop, doesn't it? Remember, if you try to put a trade with a guaranteed stop before major news like NFP you are required to put it far away.