first of all, if you've read the links on risk management and stops, you know that I try to NEVER EVER place a stop limit order with a broker because Wall Street and anyone with Totalview can then see your order and I did do this once when I went on vacation and my position was stopped out by ONE CENT and the stock then went on to rally and I lost all the profits. It reminds me of that mistranslated Japanese Video Game that was all over the net for awhile, except in this case, "All of your shares are belong to us!!! "
Secondly, never place a stop at a whole number or anywhere near an obvious level like support/resistance, a price pattern or moving averages. Look what just happened in the QQQ on a $.01 move below the intraday lows.
That's a 1 cent move below the intraday lows of $56.30 to $56.29 and look at the volume spike as stops were plundered on a fishing expedition.
Market makers or any black-box/HFT system makes money on the bid/ask spread (the more volume the more they make), they make money on even a little run like we see right now, and they make money on back door volume rebates. It's simply too easy for them to make a quick buck and with almost no effort.
So keep all of this in mind and
check out the links on the site about stops
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