Crude flash crash about 15 mins ago... scary

Discussion in 'Commodity Futures' started by BrandNewTrader, Aug 22, 2017.

  1. Am trading overnight crude.... was long from 47.70, crude was trading around 47.9... then all of a sudden i lose my connection to IB or about 60 seconds... when it's restored i see that on the 30sec bar chart there has been a dip of $0.25 while I was disconnected. the price had already recovered but had i been using stops i would have been stopped out. the scary part was the loss of connection to the IB server during the flash crash. WTF?????? no more crude futures for me HOLY SHIT...
  2. and now the flash crash has been erased from the chart. does that mean if you were stopped out your position has been restored? I just took my profits after i reconnected and got out. too shaken after that...
  3. 25 cents is not, by any stretch of the imagination, a flash crash. The daily standard deviation at the moment is running at about 90 cents. In contrast the 2010 stock flash crash was a fall of 8% (on the index - much more on individual stocks); about 8 times the daily standard deviation.

    If you're leverage and trading frequency is such that a 1 minute time out is a problem for you, then you should change brokers (although nobody would ever guarantee 100% up time). Personally I'd very seriously rethink my leverage. And my frequency. Especially given your user name.

    damon_achey, d08, tommo and 8 others like this.
  4. CALLumbus


  5. just21


    What internet connection and router do you use? Do you have alternatives as IB is very stable for most people.
  6. It's true. I was trading too many contracts for my account size... I am currently trading a wireless 4G connection from west africa so that could have something to do with it. Ok ok so it wasn't a true flash crash, but even if it was stop-hunting, why erase the evidence so quickly afterwards? I lost connection to IB right before this thing happened... great education for me and it didn't cost me anything, thankfully.

    Been trading for many years but just now moving to futures from options. Name was accurate 10 years ago. I thought it wasn't possible to change our display names?

    murray t turtle likes this.
  7. CALLumbus


    You could also consider trading crude oil and other contracts via CFDs instead of futures. This will only work if you go for bigger moves and not for a few ticks scalping, because the spreads are a bit wider on CFDs than on the futures markets. But the advantage is, many CFD providers have a "no negative balance" policy, which means even in an event like a flash crash, you cannot lose more than what you have deposited with them.
    BrandNewTrader likes this.
  8. wartrace


    You need to get multiple 4G services if your only internet option is a cellular modem. I am in an area with no real internet service and am forced to use a 4G connection. I have a Cradlepoint MBR1200b which allows me to connect two USB modems and a hotspot. These will load balance so if one goes down the data keeps coming through the other connections. Yes it is expensive to have three services however not as expensive as losing my connection. On top of this I do not trade on my home computer; I use Speedy trading servers in Chicago. Even if I did lose my home connection the server is up and running.
    BrandNewTrader and CALLumbus like this.
  9. comagnum


    The cl chart shows several areas where price has recently made parabolic moves - I call them 'raceways'. When price is within recent raceways than be prepared for high volatility.

    Raceways marked in black - Note the selling at the reversion to the VWAP (pink line).
  10. Sorry I misinterpreted your user name. However, ten years of experience or not, the point still stands: you're making multiple errors (1: trading off 4G with a strategy that more properly should be traded in an arcade or similar with decent feeds and proper robust infrastructure; 2: as you say you have way too much leverage, 3: I'd bet money you are trading too quickly) but bizarrely your main concern is dreaming up some kind of broker conspiracy around the price feed (plausible in a retail FX broker; unlikely on Crude futures).

    You're focusing on the wrong thing. At the risk of sounding like a pop pyschologist market guru type you should concentrate on the stuff you can control (getting the appropriate infrastructure, holding period, and leverage) and less on the market. Markets will move. It's irrelevant whether the 25 cent move was real or not; a 25 cent move in a minute is hardly a rare event and you should be able to cope with that - and much larger.

    #10     Aug 22, 2017