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April 13, 2013, 05:43:30 PM |
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I know it sound harsh, but what about this:
People who panic sell based on wrong calculation (either based on emotion without checking the facts, or clinging to false hopes or simply not interpreting the facts right) deserve to loss their money. Any system which limits or even prohibits their losses, shields them and "nanny" them from their own mistakes is doing bad job.
How would circuit breaker ensure this, how would it ensure that such people are hit hard?
Do not get me wrong. This is not only because the wealthy and rich and smart deserve to profit on the expense of the abovementioned ones. It is side effect, of course. But the main point of view in it is that this is the only way how the panic sellers will learn to assess facts better next time. If you know that someone will always rescue you from your mistakes, you have no incentive to avoid them.
This does not mean spreading false information or direct attacks like DDoS are ok. On the contrary. But people should learn to choose their exchanges and to change them based on the rules. I would be happy if there is a exchange with circuit breaker and clearly defined rules of its operation and exchange without it working independently. We can even have exchanges baning trade bots and HFT. As long as it is not presented as something every exchange should adopt. You can choose which exchange you trust (with trading, with pricing).
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