Arwen, I've never used them and never would given how I now feel about the integrity of the financial system.
Can we trust our financial institutions and brokerage firms to not 'look' at stops in aggregate and deliberately manipulate the market to take advantage?
I think one would have to be naive to not think that WS wouldn't do that if they felt they could get away with it.
And even if they didn't 'look', the HF black box traders armed with cheap money from the Fed would know they could harvest some easy money at any given time just by periodically manipulating the market and creating a little more than usual volatilty so as to trigger some stops.
As to a political solution on the regulatory front, one would also have to be naive to think that any one political party is ANY better than the other at policing these institutions given how lobbying works and the money that's involved in 'crafting' any legislation.
And that's just the declared lobbyng efforts and expenditure.
Who knows what goes on that is not publicized?
To think that the members of one political party are less susceptible to this influence is nuts.
never mind all the political appointments that are made that involve people from Wall Street and have influence over regulation.
Got killed that day because of stops. Had a couple names sell over four dollars below my stops because it happened so quickly. Now I just monitor as closely as time will allow intraday, but rely upon closing prices more than I used to.
Arwen: My experience with stop losses has been very poor and I stopped using them -- for the most part -- a long time ago. My experience was that in fast, volatile markets the price jumped over my stop. What a freakin waste... what a false sense of security. If the mechanism does not work when you need it, what is the point?
So the point is: I think stop loss is only good for stocks that trade with low volatility, low B/A spread. They can be used to stop you out of a long term holding of P & G but are worthless otherwise. And in the case of a flash crash --- forget it, absolutely useless.