Unfortunately it looks like you had a perfect storm of

1) Large order sent to market

2) Exchanges with a serious lack of liquidity

3) stop loss orders making things worse.

Everyone has their personal pet peeves, mine is stop loss orders. It's one of the 3 things that amateurs tend to use with out any understanding of markets. The other two being use of margin, probably doesn't need any explanation, and trading currencies/currency pairs.

In today's markets, stop loss orders are like market orders........ 99.99% of the time only people who don't know what they are doing use them.

https://news.ycombinator.com/item?id=13847775#13848698

https://news.ycombinator.com/item?id=10129355

https://news.ycombinator.com/item?id=12912781#12913058

Chris-Follow your comments religiously. You always harp on stop loss orders, can you point towards the "right" kind of orders to make instead? Thanks.

Stop loss orders aren't “like” market orders, they are market orders with a triggering event.

> Stop loss orders aren't “like” market orders, they are market orders with a triggering event.

A few things about this sentence are wrong, don't worry, markets can be tough to figure out:)

1) By your very sentence you agree they are the same but different?????

2) I never said stop loss orders behaved as market orders, I said they were alike in that most people shouldn't be using them.

4) There isn't 1 type of stop loss.

There is stop loss limit, in which the user specifies a price that the stop loss is triggered and then a limit price that the order is active to. This is sometimes called a stop limit order.

Or stop loss market in which only one price is given, this is the price at which the order translates into a market order. This is sometimes called a stop market order.

Does this clear things up?

> There is stop loss limit, in which the user specifies a price that the stop loss is triggered and then a limit price that the order is active to. This is sometimes called a stop limit order.

Every professionally-published source I've seen—whether documentation for particular exchanges supported order types, discussion of the relative merits and caveats of given order types in trading-oriented outlets, etc. has consistently referred to this as “stop limit” and reserved “stop loss” for an order in which a market order is triggered by the stop price.

It looks like the other points of apparent disagreement are connected to this different understanding of the terminology.

Other markets like NYSE and NASDAQ have circuit breakers. If an index declines by a certain amount, all trading is halted so people can think and sort out their positions. This doesn't stop a single stock from flash crashing, but transactions during a flash crash are frequently reversed.

Prevent? I wish I had the foresight to have had buy orders in at $0.11 on the rise!

Design a cryptocurrency to have stable value, not speculative-asset value.

how do you do this?

The answer is left as an exercise for the reader.

When a large market order come in, if it looks like it will move the price by more than a certain percentage, warn the seller there isn't enough depth to support his order.

And circuit breakers.