Stop loss on close basis

[adamim1]

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?

 

[skyQuake]

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.

 

[tech/a]

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.

 

[adamim1]

Cool thanks.

 

[tech/a]

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!

 

[adamim1]

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

Thats cool, i got the message.

 

[sammy84]

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?

 

[tech/a]

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

 

[sammy84]

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.

 

[skc]

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.