Shalom Shalom, You are looking for yet another "Holy Grail" of trading, a Stop Loss order that guarantees that you will never ever lose more than a preset amount regardless of what the market or your position(s) do. That is equivalent to asking for an insurance policy with no deductible and no premium, or asking the market to reimburse you for any risk in your trading, and it ain't gonna happen.

The closest thing to do would be to buy a Put option with a strike price 25-30% below your opening long price, with an expiry for the expected duration of your position. You can then net the price of the insurance policy (cost of the option) against the p/l of the long trade.

There are many other techniques that some of the professionals on this site may recommend to you, but options are the most widely instruments available to an individual trader such as you or me.

Alan

Alan Maltz, thank you for your comment.

I'm NOT looking for any Holy Grails, since I'm letting 3-rd parties to manage some of my trading funds i always want to be as much secured as possible to make sure they are not losing more than i am comfortable with.

One of the hedge funds i worked with in the past had kind of a "red button" they developed to close all positions on a certain account or more

Shalom, Thanks for the feedback! Most trading platforms have a "red button" that will close any/all positions should there be a large negative impact on the account, but they work best in a relatively orderly market. During a sharp drop, about all they can do is place a Stop Loss or Market Order for you, but that order will get executed in the order in which it was received and at whatever price trading resumes.

For example, assume you are long Friday at $100 with a Stop Loss at $70. Over the weekend there's news that the company declared bankruptcy; on Monday morning it opens and trades at $10, that's where your stop order may get executed for a loss of $90, 3 times the $30 loss you expected. UR OUT regardless if the company declares that the news was fake and the price rises back to $100 later. If you had hedged (insured) your position by buying a Put option with a $70 strike price, you would have earned approximately $60 against your $90 loss, ASSUMING good execution!

Alan

I suggest a much simpler and safer approach. in the world of trading robots stop losses are very dangerous due to spikes.

However, it's simple to develop alerts for when your account is NEARING to your red line in EndOfDay values, and liquidate gradually.

Depends on the platform, if it's MT4 simply find an EA that will close all when a certain equity is reached. You should easily find that. Run it on an vps yourself and you will have an Auto close of all open positions momentarily if a certain equity is reached.

Saxo will liquidate you at 150% of margin if your available capital supports this, I've never asked if that can be less as requested by the account holder. You are giving brokers licence to hammer you on liquidation with your desired approach rather than having individual stop losses that would equate to the total capital loss you were comfortable with should they all be triggered though.

Actually there is however,first of all it depends on the enstrument you are working with and time dimensions you aim so you can determine,for example the daily avarage range on the enstrument and you should use a flexible stop loss level not fixed if you improve a machine but for only a strategic thinking you should aim only %5 of your deposit for loosing because it is a heads or tails game and your probability for gain or loss will amortize each other in long term or as the game number grows.Main question you have to ask is that what is the source of gain.It is not related with protection,it is just helping you to loose later than non stop trading.Good luck.

I know there are many brokers offering this kind of services but dont know their names, but of course it is not for free, you have to pay a small premium for every position you take. Is It really worth it? For those brokers probably.

if you want a hard stop at the broker account level, the best you could do is ask them to raise either the margin level % or stop out level % of your account. So figure out how much your account starting equity is, and then set the margin call level closer to 200% or more as well as the stop out level. But remember that your traders need to be aware of this change.

It's not exactly what you are looking for, but that's the reality of trading. You must have trust between whomever is trading your account that they will manage equity stop losses appropriately.

As said priviously by some fellows you can use an automated trading strategy like for example open position X (the underlying) with direction Y (long/short) with size W and stop loss Z. the are several problems with that. first if the stop is hit your broker sends automatically a market order which means you don t have control over the price you gonna get. second your market maker knows how to shake you off your position if you post your stop

ig market for example offers a guarantied stop loss which cost few ticks but have the advantage of giving you a guarantied stop loss price (if market price is bellow they have to make the difference). i believe this is what you need.

fxmarket offer automated trades but no guaranted stop loss price. ig offers guaranted SL levels but no automation. so you need to put them manually for each trade

i think there are liability issues on retail brokers offering this feature... but there are a few that do it.....

In case of MT4 it could be an EA which will check a maximum amount of money that you can afford to lose. It will close all open positions at once (actually one by one ;-)

If interested i have some unique trailing stops that are correlated to different indicators. The trailing stop follows the path of the indicator following price until price interacts with the data point of the indicator. If your interested or curious feel free to contact me...

IG do offer guaranteed stops. You only pay the additional spread should the stop be executed. So at the time of trade the extra protection does not cost anything. If you manually close the position you will not be charged. Please feel free to message me for more details.

you could of course rethink your entire trading plan. By closing all positions, you deprive yourself of all the potential gains (which you are expecting, otherwise you would not have taken these positions in the first place) and be frustrated the next day by seeing how much the market has moved in your favor on the closed positions.

Imho, you need to handle the stop losses on a trade level, and not on the account level

happy trading

The effectiveness and benefits of SL strategies is not really clear. Quite a few studies shows that a trading strategy with a Stop Loss strategy included, is inferior to a strategy without SL feature. For example, have a look at these studies:

Gollier, C., (1997). "On the Inefficiency of Bang-Bang and Stop-Loss Portfolio Strategies", Journal of Risk and Uncertainty, 14, 143-154.

Dybvig, P., (1988). "Inefficient Dynamic Portfolio Strategies, or How to Throw Away a Million Dollars in the Stock Market," Review of Financial Studies, 1, 67-88.

Kaminski, K., Lo, A., (2008). "When Do Stop-Loss Rules Stop Losses?," SIFR

Research Report Series 63, Institute for Financial Research.

Lei, A. Y., Li, H., (2009). "The Value of Stop Loss Strategies", Financial Services Review, 18, 23-51.

For stocks with a 5- 6-year horizon stop losses can play a useful role *sometimes*.

My firm has carried out tens of thousands of tests on different types of stop orders over the years and whether or not they should be used depends entirely on the circumstance. We have developed a formula for determining when that should be.

If an initial long position is taken within a few months of a stock's bear market ending, our research clearly shows stop loss orders generally lead to poor ROI. However, combined with other tools and late in the average bull market, stops used properly provide discipline and reduce emotions, the downfall of many private investors.

If you want to get a stock itself to time the market within reason then stop orders of various kinds are an important tool. Our stops have nothing to do with current stock price, however, but rather with trends that are measured in different ways. We have managed successfully to automate long- and medium-term stock investing.

A simple automatism solves your problem, advise you with your broker / platform. Good trades Traders.

There are various mathematical models where you can with a chosen certainty not lose more than x% of your assets, but there is tail risk and that stays with you, as it should because you also get to have the upside 'tail opportunity'. If that isn't good enough, the only true stoploss-guarantors are derivatives.

If none of that works, you must downsize the investments to x% so that a total loss in that position results in your desired x% stoploss. Needless to say, that doesn't combine with leveraged positions.

you just can't, or choose a broker with an api, like interactive brokers with an external program like filemaker pro, or a broker with an MT4 or MT5 platform and program it yourselve with an expert.

thank you all for your great comments

I was given several names of brokers such as CFH Clearing, IG and more who suppose to give a general stop loss protection to trading accounts. no matter if you put a stop loss into your trade or not. will check it precisely and let you know of my final conclusion

Tradeworks has this feature, however, you can only use it as part of a trading system/algorithm.

Mikael Breinholst I will definitely check it out, however I'm sceptic as for now i havent found a tool that really ease and simplifies complicated strategy programming.

No broker can warranty that a stop order will execute at a particular price. Even after execution, if the broker by mistake thinks they got you a price and then get a much worse price from clearing, they must pass it to you.

This is usually not a problem as there is plenty of liquidity for your order. But in a liquidity event such as the flash crash it becomes a real issue.

I developed this a while ago but only for MT4. pm me if interested.

"Why I stopped using stop loss orders": http://www.marketwatch.com/story/why-i-stopped-using-stop-loss-orders-2013-05-09

I ended up writing a stop loss at the portfolio level in my algo. It is a great idea to manage risk as the portfolio level as you can then accept some more risk in individual positions.

Non US traders should look at CMC Markets to trade in.

There are brokers that can guarantee you stop loss :P but you have to go binary options haha https://goo.gl/3LhHMT

we are providing risk manager softwares , have a look at my profile..

DukasCopy has such a feature in Equity Management there is a Stop Loss Level which can be set. When the equity of the account falls below the limit then all positions shall be closed, pending ones get cancelled and the trading blocked. More details here: https://www.dukascopy.com/wiki/en/forex-cfds/portfolio-management/equity-management

@Shalom, Not quite what you had in mind but our AdaptableBlotter.JS product is proving extremely popular on trading desks and primary reason is the CellValidationRules function which allows you to create your own runtime rules based on any criteria you set and then to prevent further action when they are breached. See: http://www.adaptabletools.com/JS_cell_validation.html

Jonny Wolfson can I use your tool on my interactive brokers or any other trading account to close automatically all my open positions when certain parameters in my equity fields are reached ?

Mendel Mark Zelickman take a look

Moving stops can be applied to trail both exit and entry positions to minimise capital loss. These stops act as triggers to sell or buy when trend reversals are confirmed by algorithms: https://www.facebook.com/appVesta/photos/a.1707507776129813.1073741827.1707478006132790/1801870656693524/

My only concern is a black swan event like Jan 15th 2015 on the CHF pairs, where the market imploded and no stops were honored due to the severity of the move and lack of liquidity in the opposite direction. There is where accounts can go into negative balance. My suggestion is to have only enough money in your trading account to trade max leverage and have cash reserves in a linked bank account that you can transfer quickly to your brokerage account if required. Brokers tend to come and go, even the good ones eg Alpari UK, FXCM US, but banks tend to be a bit more stable. Cheers.

You see MetaStock platform allows you to put trailing Stop Loss, once you are matching in that profit level , Robots like Fap turbo offers Stop losses, but your stop loss should not be shown in the system, You must go for the stealth mode.

you need a simple EA that stop tradin and close all positions on a certain equity.