[Analemma_]

Even market orders on highly liquid, perfectly well-understood things like forex can bite you in the ass; see all the levered people who got wiped out when Switzerland dropped their peg to the Euro. Stop orders on cryptocurrency are just pure idiocy.

[lbotos]

I'm not following why stop orders on Crypto are idiocy?

[PeterisP]

You'd want to buy low and sell high; stop orders will force you to sell low in case of a random large fluctuation; cryptocurrencies are much more prone to random large fluctuation than most other types of assets. Ergo, agreeing to stop orders on cryptocurrencies is more dangerous than for other assets and is likely to cause you to lose money.

[clarkmoody]

GP probably means stop -> market orders. When the stop price is reached, the order converts to market.

Various brokers and exchanges offer more types of stop orders, such as stop -> limit, where you set a limit price, and your order becomes a limit order after the stop price is reached.

Of course crypto exchanges take forever to implement new order types, and I'm not sure any of them have stop -> limit.

Also, stop orders don't work in general in a slipping market because liquidity vanishes from the book.

[danmaz74]

Don't know about the other ones, but the biggest exchange for alts, poloniex, has stop-limit.

[relix]

How is the Swiss franc gap up related to market orders?

[gricardo99]

It's not "related to", it's "illustrative of" the pitfalls of market orders. The point was that even in highly liquid markets (i.e. Swiss franc), you can have sudden gap moves and liquidity fluctuations and a market order will just match against whatever momentary, ridiculous price happens to be there.

I would note however that after the SNB event many exchanges and brokers busted the trades that were done at extremely off prices.

[jdmichal]

A post-gap market sell on a gap up can end up filling pre-gap buy orders. And pre-gap market buys can end up being filled by post-gap sells. So people end up selling for much less or buying for much more than expected.

[gm-conspiracy]

I think you are agreeing with the parent?

[aeone]

Replying to someone doesn't necessarily mean disagreeing with them.

[gm-conspiracy]

I disagree.