Mental stops are what I use. It iliminates being stopped out by spike action. However, maybe it is better to have some kind of stop way beyond, one that you don't think will be touched, just to save you losing more than is acceptable?
When I was telephone trading with City Index, before the online started, one of my phone calls was not obeyed, with the result that I was open when I should have been closed. They politely told me that I had to prove it, because their dealers did not make those kind of mistakes.
I was index trading at the time and my potential loss was running into several thousand pounds. Fortunately, for me, I lived in Spain and international calls are logged. Telefonica came up with the dates and times for the period, posted them to me and there were four calls that morning, where CI said that there were only three. Open, close, open close- I knew I was right. CI were full of apologies and they altered my account to show a 500 pound profit.
However, it was the end a of a good relationship. I didn't feel comfortable with them and closed the account.
The web seems to have corrected the possibilities of making that kind of mistake as the account status is on view, but the story has a lesson that would have cost me dearly if I had lived in the UK. With local calls, how could I have proved that I was right?
Remember that , sometimes, it is necessary to close a position by phone so protect yourselves in some way. With big positions (for me) I ring again to confirm my position if I am away from my computer and can't check my account.
Split
