Flash crash october 5th 2012

[giggles]

As a result of yesterday's flash crash I lost all the profits that I made over the past one month and instead ended up with a loss. However, because of proper position sizing, it only took out a small percentage of my account.
This volatility is killing us small retail traders.
Now, I have decided to keep a even larger stop loss - a 5X weekly ATR stop and a smaller mental stop loss - say a 2X or 3X daily ATR stop.
This reduces your position size drastically, but at least you can save yourself from the flash crashes.

Any other opinions or alternative strategies to tame the volatility beast?

 

[Anillal]

As a result of yesterday's flash crash I lost all the profits that I made over the past one month and instead ended up with a loss. However, because of proper position sizing, it only took out a small percentage of my account.
This volatility is killing us small retail traders.
Now, I have decided to keep a even larger stop loss - a 5X weekly ATR stop and a smaller mental stop loss - say a 2X or 3X daily ATR stop.
This reduces your position size drastically, but at least you can save yourself from the flash crashes.

Any other opinions or alternative strategies to tame the volatility beast?

You can not do anything about volatility sir. It is there now. Hard fact is it is going to increase far more because the brokerage is getting cheaper in response to the way trading is being taken up by top professionals to road sweepers as one sure road to riches. With so big a crowd chasing the same goal on 24/7 basis means the past strategies are not going to work the way they used to. So the best you can do is to figure out your own system, your own edge and never let it out in public. Keep it secret from even the closest person in your life.

 

[SexyTrader]

I was away relaxing..when this so-called crash happened....hence I did not have any trades open on Friday! Guess I was lucky!

But these flash crashes are becoming very common now. There is a pattern to this....and they chose a Friday to do that ? Knowing very well that Emkay will not be allowed to trade for quite some time! Someone may have been out to get them to sink.....all theories yes, but they make a pattern in a round-about way is what I feel.

 

[Huzefa_The_One]

I dont use stop loss trigger at all. I prefer squaring off any trades of mine with a small gain of 10% or less.

 

[mcxinvest]

The Flash Crash was totally a Human Error, which no one can expect.
What i am in fear is, now a days Auto trading has started , though on a small scale, but it will definitly going to get big in coming months. And i expect ratio of these kinda crash to be more.

 

[sumosanammain]

It was a normal order.

Suppose some FII wanted to sell 650 cr worth of securities at market, this would happen again.....

There is no depth in the market.

If 650 cr of orders is enough to wipe out the entire order book in Nifty fifty stocks, I would feel that the current bull run is exagarated.... without depth.