New to investing - a question on stop loss orders

[JRam]

Would a trailing stop loss order automatically sell your position when your investment has declined by a percentage? I've been reading up about stop loss orders and just want some clarification.

Does any exchanges offer this function? I use Mt. Gox and it definitely doesn't offer stop loss orders.

[unclescrooge]

Hello,

Stop orders do sell your bitcoins automatically when price decline under your set point. The trailing function allow this set price to follow the ticker price when it goes up (a way to "lock-in" profits).

However, stop orders behave like market orders when they are triggered, so there is no guarantee of the price at which they will be executed (in a crashing market becoming very illiquid, you might have some bad surprises).

I could suggest Bitfinex.com as an exchange proposing stop orders (disclosure: It's my exchange )

Raphael

[Stephen Gornick]

Does any exchanges offer this function?

No market exchanges in which you are buying or selling bitcoins currently offer this.

It has been something discussed for years though.  Camp BX's site has mentioned them since its June 2011 launch, for example.

[JRam]

Thank you guys, I'll definitely take a look at Bitfinex and Camp BX. These trailing stop loss orders seems like something I would use a lot if I'm not able to constantly monitor my investments. I'm surprised that the current exchanges like Mt. Gox doesn't already have these types of advance trading function as they seem very convenient.

[Dargo]

Another exchange that will offer stop loss orders (and many other order types) is kraken.com. Kraken is in open beta right now, so if you want to play around with stop loss orders to get the hang of it, you can sign up for an account here

beta.kraken.com

Your account will be funded with play money so you can try it out. The way trailing stop loss orders work is that you set a "stop offset" (either in absolute price, or a percentage) and a market sell order will trigger once price falls by the stop offset amount. For example, if you set a stop offset of 5%, the market sell won't trigger until price falls by 5%. Kraken should go live within two weeks, possibly next week. Note that your beta account will be wiped at launch, so you would have to open a new account for real trading.

Disclosure: I work for kraken.com (Payward), as vouched for here

https://bitcointalk.org/index.php?topic=192104.0

[JRam]

Your account will be funded with play money so you can try it out. The way trailing stop loss orders work is that you set a "stop offset" (either in absolute price, or a percentage) and a market sell order will trigger once price falls by the stop offset amount. For example, if you set a stop offset of 5%, the market sell won't trigger until price falls by 5%. Kraken should go live within two weeks, possibly next week. Note that your beta account will be wiped at launch, so you would have to open a new account for real trading.

Disclosure: I work for kraken.com (Payward), as vouched for here

https://bitcointalk.org/index.php?topic=192104.0

Yes! This function is exactly what I'm looking for as I'm not able to watch my investments 24/7. I'll def take a look at Kraken for this convenient trading feature.

[mmortal03]

Even better would be something like this: https://bitcointalk.org/index.php?PHPSESSID=uqt7ne12f8ri6clq777s1rpma4&topic=149689.0

[NewLiberty]

For stocks with a low beta you can keep your stocks pretty tight, for something high beta (lots of volitility) like Bitcoin, you will likely get stopped out more often than you would like to be unless you want to be actively trading.

[San1ty]

Serious traders often find stop losses to rather be start losses.
Instead use a strategy on a time-frame that works for you and stick with that as your entry / exit strategy.

[mmortal03]

Serious traders often find stop losses to rather be start losses.
Instead use a strategy on a time-frame that works for you and stick with that as your entry / exit strategy.

These would seem to not necessarily be mutually exclusive, though...