Topic: Does Mt Gox have a 'stop loss order' feature (Read 2787 times)

This isn't the CME.  200ms would be more than fine, you could probably get away with double that.  Hell in peak volume market orders can take 10 to 20 seconds to fulfil on MtGox.  Maybe in 20 years Bitcoin HFT will require ultra low latency links, but likely by then Bitcoin will simply be traded on Forex with all its fiat brothers.

Yes. I guess I was asking for another genius to come along and solve the problem. I don't have an issue with Mtgox because my trading is ultra low frequency . But I can imagine that some people rely on their software to make the right choices and they utilize the API - and that can get shut down, which probably results in those traders making a loss.

If you do decentralized: I guess you'd also have a blockchain. So the "frequency clock" would be the time it takes to find a block. But then you'd have to resolve all the orders in the block in a fair fashion.

How would you architect a distributed trading platform with low latecy, atomicity of transactions and no double fill of orders?

A long time ago I was involved in a project related to automated trading on CME GLOBEX. I seem to remember the other guys at work mentioning that latencies above 2 ms (or it might even have been 0.2 ms) between our execution engine and GLOBEX was unacceptable. That was the standard back then 10 years ago. I would bet that a global distributed p2p platform can't even do 200 ms.

And the cool thing is that MTGox can shut down the API any moment to prevent automatic trading  .

Time for someone to come up with a decentralized trading platform .

If you want it now it is probably best to do it yourself through their API. Or pay someone to do it.

As others have pointed out due to the volatility of the BTC market what you'd really want is a sell stop-limit order. You enter a trigger price (say $11.50) and a limit price (say $10.50). When the price touches or drops below $11.50 the $10.50 sell limit order is placed. There is still no guarantee that your order will be filled, but at least you know you won't be selling at 0.02.

A trailing stop or trailing stop-limit order would be another useful feature to have. In this case the stop price will be expressed as some percentage or offset of the peak price. Typically you'd set this during a rally. You'd use this to get out of your position with a profit when the current rally ends and begins to reverse.

No.

At 11.50 your order executes and becomes a market order.  Market orders enter the queue in the order they are received.  That puts your "sell 100 BTC @ market" order in the queue behind the unexecuted portion of the manipulators sell order plus any stop-losses higher than yours plus anyone who manually panic sold ahead of you. 

So while your order may execute at $11.50 the manipulator gets to sell @ $11.50 and $11.00 and $10.99 until his entire massive sell order is exhausted.  Then the sell orders of everyone who had a higher stop and manually put in panic orders execute.  All those are at market so they are eating away at the bid side of the market.  The $10.99 bids get matched, then the $10.80, the $8.00, the $7.50, the $6.00. 

Lets say all the market orders before you drive the price down to $4.82.  Your order is finally at the top of the queue.  You "sell 100 BTC @ market" order executes and you get $4.82 per BTC.  Maybe that is the bottom.  Maybe there are other stopped sales which drive it down to $3.00 or $2.00 but eventually all the stops are executed. 


So how happy would you be if BTC was $13.00 and you had an $11.50 stop loss.  So manipulator with 200K coins drove the price down to $4.82 where you sold your coins and seconds (not weeks or months but seconds later) the price was back at $13.00.  Now flip it around.  If you could with minimal risk makes 20% profit in a day off fools setting stop losses would you?  If you wouldn't do you honestly think nobody on the planet would?

That is a common misunderstanding. Your stop-loss order says to sell your shares at any price if the price drops below 11.50, and when it is triggered, you might not sell immediately -- you have to wait your turn. In a very liquid market, there is not much danger, but bitcoin markets are not very liquid.

I'm pretty sure people have managed to stuff that up in the past and complained when their orders executing automatically has caused them to lose money (as if it's somehow MtGox's fault if people don't change their orders according to market conditions or if they set fake buy and sell orders and those get executed while they're AFK).


By definition, a stop loss order is a market order which means that your coins will be sold at whatever the market is offering once the stop loss is triggered at 11.50.  What you're talking about is a stop limit order, which may never get filled at the price you want - so you may miss the opportunity to sell at all in a falling market.

I don't get why that's a bad thing. If I put my stop loss at 11.50 and someone attempted that, I'd still get 11.50 per coin. Where is the loss in that? Also, why can't i have it such that if I don't get the price I want then I do not sell?

Why is the OP asking for it?  Others have asked for it in the past.  IIRC MtGox rep said they would consider it.  I figure eventually if enough people ask for it (bad idea or not) they will give people what they "want".

Why does MtGox allow you to have an account with huge amounts of USD & BTC with no 2 factor authentication and a weak password?  
Seems like a bad idea but obviously people "want" the ability to create accounts and load them with insane amounts of money very poorly protected.

why would MtGox want to introduce the feature in the first place? Sounds like a bad idea anyway.

Also it makes more sense to set your boundaries manually as separate buy and sell orders...

the technique is called "stop-hunting" and although it is illegal in financial markets, it does happen on a regular basis without prosecution.

http://www.investopedia.com/terms/s/stophunting.asp#axzz23rZgpYrs

They don't hack anything. They just sell a large number of BTC to force prices down, triggering a cascade of stop-loss sales that forces prices down even further. Then they buy back at the bottom and prices recover to previous levels. They make a killing in a few minutes, and the people with the stop-loss orders lose a lot of money.

It wouldn't involve hacking.

Sell @ market 90,000 BTC.  Blam your stop loss along with hundreds of other orders involving thousands of BTC execute.  The manipulator waits till selling pressure abates, buy back 90K BTC at the bottom and pockets the difference.  Bitcoin doesn't yet have the market depth and breadth to avoid manipulation like that.  Normally someone trying to cause a panic sell has to hope people are watching and fearful enough to join in and create selling pressure.  With stop losses they simply have to press a button.

Eventually MtGox will offer it and a couple weeks later there will be a rant thread from all the noobs  with stop losses who got raped in a 2 second flash crash.

How would that be any different from an attacker hacking your account and selling your coins? Why would they be able to execute all stop losses site-wide?

No and if they did (strangely lots of people "wan't" it) you wouldn't want it the first time a manipulator simply sold to force all the stop-losses to execute. 
The chart would look like a straight vertical down and straight vertical up.  You probably wouldn't even notice except your coins would be gone and at the worst possible price.

Hi,

I'd like to know if Mt Gox has a 'stop loss order' feature? i.e. an automatic trade order I can make such that if the BTC price were to fall below a certain level, it would automatically sell my BTC.

Thanks