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Limited Risk Accounts, Should have the option to set Normal stops as well

This thread contains an account type known as "Limited Risk". Due to regulatory changes this account type no longer applies for European countries. If you have any questions relating to this, or wish to continue the discussion, please start a new thread. 

Message added by JamesIG

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I currently have a limited risk account with IG and the objective of this account was supposed to protect me from risk. In fact it is actually doing the opposite. The fact that you have to set a guaranteed stop at 5% ( 10% for some instruments) away from your entry is ridiculous. I currently trade a strategy in which I manage my risk to around 2%, sometimes less, Thus the guaranteed stop option is exposing me to more risk than I would be exposed to if I had the option of setting a normal stop. I understand the concept of protecting the client in the event of slippage, but a slippage event of 5 or 10% doesn't happen everyday and thus it is ineffective to use a guaranteed stop for every trade. I have also been told I can exit my position manually, but as any price action trader would know, when you set a stop below or above a support or resistance line and the price breaks that level, the market can move very quickly. Thus using alerts to exit my positions manually is also ineffective.

 

 

IG should have an option to set a normal stop loss and then in addition a guaranteed stop as a fail safe for limited risk accounts. I feel the current set up actually exposes traders with limited risk accounts to more risk, especially if they know what they doing and set stops for every trade. This is something that should be looked into.

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I have the same problem, I would really like to use my IG account for most of my trading but the guaranteed stops make the CFD's and spread betting completely unusable. I find this to be a real shame because the platform is very good and I like the account in general. This needs to be changed.

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Yes Setting the risk 5% or 10% away defeats the purpose of having a guaranteed stop, so why cant we have a regular stop ahead of our guaranteed stop so we don't have to pay the premium in a snormal scenario and only pay the premium if it passes through the regular stop? this is a con setup to sting retail traders. eventually IG will get caught out and have to reimburse their customers.

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Totally agree....as far as I can see, it's a counter intuitive move. I understand the need to protect clients & IG....but this is driving me mad and am constantly having to break my own rules just to place a 'normal' trade. Trying to move my stop up whilst in trade (which I do occasionally to lock in profits etc.) can also be problematic and sometimes will only allow me to move it further away - which really is the opposite of protection.

 

And when I called to discuss it, I almost got laughed at! When I then asked what it would take to have the restriction lifted, I was informed they couldn't say,there is no set criteria and to just keep checking back to see!

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All,

 

An option you could consider would be to take out a "one cancels other" order at the price level that you would like to be stopped out at.

 

For instance, if you are going long in XYZ at 100.00, your guaranteed stop is set to 90.00, take out a short order at 98.00 (to achieve the desired 2%).

 

Be mindful of the platform that you are using, if it is "good until cancelled" in which case the order will remain open until you cancel it (in which case, if you close your position, you will also need to manually close the contra order). On some advanced platforms, you can "attach" orders and make them good for the life of another order.

 

You can use this strategy to also scale into and out of trades.

 

This does not constitute advice and all that legal jazz, all my own opinion, if you lose, it's your fault.

 

[MOD EDIT: please refrain from posting personal details as this goes against our terms of service] 

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