# Stop loss on close basis



## adamim1 (21 September 2011)

Can someone explain the basis of this? From what I have googled is that you would use this stop loss in a position trade so no to get caught out from spikes in intraday. However how does it actually work?
For example.

Say i buy into silver at 39.50 with a stop at 38.50. Now in intraday trading the price dips to 38.19 and closed at 39.10. Now I gather that your stop does go through since its only on close, but what happens if it closes at 35.50? does that mean your stop gets gets activated at 35.50?


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## skyQuake (21 September 2011)

adamim1 said:


> Can someone explain the basis of this? From what I have googled is that you would use this stop loss in a position trade so no to get caught out from spikes in intraday. However how does it actually work?
> For example.
> 
> Say i buy into silver at 39.50 with a stop at 38.50. Now in intraday trading the price dips to 38.19 and closed at 39.10. Now I gather that your stop does go through since its only on close, but what happens if it closes at 35.50? does that mean your stop gets gets activated at 35.50?




Yep. Spikes are part of the market, and are fairly rare anyway.


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## tech/a (21 September 2011)

You don't sell you position until the next days trading session as you won't know what the close will be until it's actually closed.

From the testing I have done over the years there are no real benefits in waiting for the close.
In some cases a solid stop saves you from a much lower close then sale and on some instances you'll not be loses out as price rallies from a spike down.


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## adamim1 (21 September 2011)

Cool thanks.


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## tech/a (21 September 2011)

tech/a said:


> You don't sell you position until the next days trading session as you won't know what the close will be until it's actually closed.
> 
> From the testing I have done over the years there are no real benefits in waiting for the close.
> In some cases a solid stop saves you from a much lower close then sale and on some instances you'll not be loses out as price rallies from a spike down.




Sorry about some of the English here.
I pad spell check is a real pain!


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## adamim1 (21 September 2011)

tech/a said:


> Sorry about some of the English here.
> I pad spell check is a real pain!




Thats cool, i got the message.


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## sammy84 (21 September 2011)

tech/a said:


> You don't sell you position until the next days trading session as you won't know what the close will be until it's actually closed.
> 
> From the testing I have done over the years there are no real benefits in waiting for the close.
> In some cases a solid stop saves you from a much lower close then sale and on some instances you'll not be loses out as price rallies from a spike down.




Tech

I could be wrong but I remember you posting sometime ago that if your stop is hit you typically wait for the close to close out the position. This has changed?


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## tech/a (21 September 2011)

No
For portfolio trading that's part of the system conditions
For discretionary it when hit.


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## sammy84 (21 September 2011)

tech/a said:


> No
> For portfolio trading that's part of the system conditions
> For discretionary it when hit.





Sorry misunderstood. I felt the idea had some merit but had never taken the time to test it.


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## skc (21 September 2011)

skyQuake said:


> Yep. Spikes are part of the market, and are fairly rare anyway.




They seem quite common to me... I guess it depends on how you define spike.


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