The VAR Implementation Handbook, Chapter 10: Value-at-Risk-Based Stop-Loss Trading
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The following is a chapter from The VaR Implementation Handbook, which examines the latest strategies for measuring, managing, and modeling risk across a variety of applications. Packed with the insights, methods, and models that make experienced professionals competitive all over the world, this comprehensive guide features cutting-edge research and findings from some of the industry’s most respected academics, practitioners, and consultants.
The VAR Implementation Handbook, Chapter 10: Value-at-Risk-Based Stop-Loss Trading
Stop-Loss Orders: A False Sense of Security
Stop-Loss Orders: A False Sense of Security
Rather than “insuring” your portfolio, you could be “ensuring” a loss.
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Iwtst! 17: Super-hero Movie, 21, Stop-loss, Flawless, and Run, Fatboy, Run!
Image taken on 2008-03-24 00:21:11 by Ben Brown.
Stop-Loss – Framed Movie Poster – 11 x 17
- You are looking at a beautiful, professionally framed poster.
- This frame is made specifically for 11 x 17 posters.
- Packaged and shipped in a sturdy corrugated box.
- Clean and sharp looking aluminum frame with clear plexiglass.
- This poster is from Stop-Loss (2008)
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MovieGoods has Amazon’s largest selection of movie and TV show memorabilia, including posters, film cells and more: tens of thousands of items to choose from. We also offer a full selection of framed posters. Customer satisfaction is always guaranteed when you buy from MovieGoods.
Kimberly Pierce at a screening of Stop-Loss
Image taken on 2008-03-04 23:03:30 by Steve Rhodes.
Army specialist jailed for rap song about stop-loss
Army specialist Marc Hall has been jailed after writing a rap song against the Army’s controversial stop loss policy and mailing it to the Pentagon. The stop loss policy makes it legal for the army to extend a soldier’s deployment or service beyond their designated time in the military. Hall isn’t the first soldier to raise questions about the policy, but now his could have further implications for freedom of speech in the army.
Forex Training – What is Stop-loss Hunting?
Many retail Forex traders are concerned about stop-loss hunting because they are virtually powerless as individuals to defend themselves the powerful hunters. In this short article, Ill explain to you what stop-loss hunting is, and how you can avoid being prey to it.What Is Stop-Loss Hunting?
Basically, stop-loss hunting is a trading strategy that tries to force retail traders (like you and me) out of our positions by driving the market price to a level where our stop-loss levels are placed. This is a strategy that the investment banks and hedge fund managers adopt because they have the resources to do it.
Simply put, the big financial institutions buy (or sell) a large amount of currency that causes the market price to go up (or down), hitting the retail traders stop-loss levels, and causing us to exit the market at a loss. In the meantime, they will gain from our losses.How Do They Know Where Our Stop-Loss Levels Are Placed?
Usually, this happens when there is an obvious support or resistance line on the trading charts. With a clearly defined resistance level for example, institutional traders will know that many retail traders will place their stop-loss trigger just a few pips above the resistance line.
Your trading brokers will also know exactly where your stop-loss triggers are placed. After all, they provided you with the trading platform, didnt they? Whenever you place a stop-loss order on your trading platform, the information will be relayed back to the broker, and he will know your exact stop-loss price.
Its hardly fair game, huh? The odds of profitable trading are highly stacked against you. Thats why youll need to fully understand the risks of trading, and how to avoid them.
To learn more, download my free 26-page guide here: “Forex Trading Traps!”
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
What Is A Stop-Loss Order? Why Should I Care?
A stop-loss order is the trader’s best friend. The reason for this is simple: the stop-loss order can help the savvy investor avoid losses, and protect gains. With something of this great of value, you’d be almost sure that everyone would already know about it and use it. This is not the case. Many neophyte investors seems to either not know or not care about protecting their downside.
How does a stop loss work?
A stop-loss order is generally a limit order that executes at a given price. If you have a stock you bought at $18, and it’s not at $24, you’ve made a hefty profit and can use a stop loss to protect your profit. If you set your stop-loss order to $23, if the stock falls by a dollar, the trade will automatically execute, and you’ll be sitting comfortably on the sidelines, in the green. The beauty of the stop-loss is that it’s automatic. You don’t need to fret whether to make the trade, and you don’t have to be sitting next to your terminal waiting to hit the “SELL” button. Stop-loss orders can be setup as “Good Til Cancelled”, so you can basically “set it and forget it”.
Can a stop-loss order hurt you?
Many new investors are frightened to use a stop-loss order for fear the trade will execute on temporary news, and the trade will be closed. This is a real possibility, and for this reason you need to be careful when setting the amount that triggers the order. Many people use a 8% stop, but this might be too tight for many volatile issues. But a 15% margin should give you plenty of wiggle room. If a stock loses 15% of its’ value in one trading session, you’ll be very happy you’re in cash soon enough.
Trailing stop-losses protect your gains.
If you are already in the green, you can use a trailing stop loss to protect your gains. A trailing stop-loss is set to automatically trail the share price by a certain amount. If it’s 15% and the stock is at $100, the stop-loss will execute at $85. If the stock went to $200, the stop loss would be at $170. This way you always protect yourself against a loss automatically, as soon as the stock goes down in price.
The terminology for stop-loss orders changes from brokerage to brokerage, so you’ll have to check your console for the exact order on setting one up. Generally it’s a one-click process that is quite easy. There may be a small fee, but generally there is not. If you forego using stop-losses, you better at least be prepared to be an extremely active trader who monitors your investments constantly. Failure to do so for even a day can result in huge losses. Take a look at the massive selloff in companies like Taser or Google to see just how disastrously even a great trade can get if you don’t protect the downside.
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Nikkei opens +0.1%; stop-loss hunt successful in JPY crosses
Nikkei opens +0.1%; stop-loss hunt successful in JPY crosses
USD/JPY printed 93.57 and EUR/JPY 125.23 before immediately jumped 10 pips which smells like a classic stop-loss hunt to me. I would not be at all surprised if both of these are the lows for the session and when London comes in they say “how low did they trade”?
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