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Stop Hunting?

  • Post #1
  • Quote
  • First Post: Sep 19, 2005 6:23pm Sep 19, 2005 6:23pm
Just in the last 15 minutes I got stopped out of a trade...and I'm a little confused.

I have 3 different live feeds...the only feed that went to my stop, was my brokers. The other 2 feeds did not get to within 5 pips of that number. My brokers feed immediately spiked down to my stop...then went immediately back up to the other numbers, where it is now.

My question is...would they do something so obvious? It doesn't seem like my measley 3 mini's would warrant such an action. I was amazed it spiked right down to my stop, then right back up. My broker is RJO'brien, I can't imagine such a highly respected company would do something like that. I've heard of "stop hunting" before...but, I've never really been convinced it's as common as some say.

I guess I just need confirmation that I'm just being a little paranoid
I think you should contact them. It could've been a false spike on their system. These things happen.
Keeping it Simple
Quoting SouthernFried
Just in the last 15 minutes I got stopped out of a trade...and I'm a little confused.

I have 3 different live feeds...the only feed that went to my stop, was my brokers. The other 2 feeds did not get to within 5 pips of that number. My brokers feed immediately spiked down to my stop...then went immediately back up to the other numbers, where it is now.

My question is...would they do something so obvious? It doesn't seem like my measley 3 mini's would warrant such an action. I was amazed it spiked right down to my stop, then right back up. My broker is RJO'brien, I can't imagine such a highly respected company would do something like that. I've heard of "stop hunting" before...but, I've never really been convinced it's as common as some say.

I guess I just need confirmation that I'm just being a little paranoid
call them and explain your situation you might be surprised what they will do. my opinion is well known here on this subject. i dont doubt that it happens but i would call them and point out your other two price feeds. they dont want to lose customers so its worth a try. its worked for me before. cant hurt to try.
  • Post #4
  • Quote
  • Edited 7:23pm Sep 19, 2005 7:14pm | Edited 7:23pm
Thanks guys. RJO's tech support is closed right now, and I'm told that's who I need to talk to. Gotta get a screen shot, etc...which is all new to me, so this will give me some time to figure it out.

My stop on cable happened at 21:53 GMT time. My sell stop was at 1.8014 (I was going long). The closest my other two feeds got to my stop, was 1.8016 (about 15 minutes later)...and neither of them reached 1.8014...and both are around 1.8030 at this time.

Sorta irritating, cuz I woulda made my measley 10 pips if I hadn't got stopped out.

Oh well, time to see what kinda response RJO gives me.

Thanks for advice.

SF
Quoting SouthernFried
Thanks guys. RJO's tech support is closed right now, and I'm told that's who I need to talk to. Gotta get a screen shot, etc...which is all new to me, so this will give me some time to figure it out.

My stop on cable happened at 21:53 GMT time. My sell stop was at 1.8014 (I was going long). The closest my other two feeds got to my stop, was 1.8016 (about 15 minutes later)...and neither of them reached 1.8014...and both are around 1.8030 at this time.

Sorta irritating, cuz I woulda made my measley 10 pips if I hadn't got stopped out.

Oh well, time to see what kinda response RJO gives me.

Thanks for advice.

SF
Please keep us posted here.
Thanks.
Quoting SouthernFried
Just in the last 15 minutes I got stopped out of a trade...and I'm a little confused.

I have 3 different live feeds...the only feed that went to my stop, was my brokers. The other 2 feeds did not get to within 5 pips of that number. My brokers feed immediately spiked down to my stop...then went immediately back up to the other numbers, where it is now.

My question is...would they do something so obvious? It doesn't seem like my measley 3 mini's would warrant such an action. I was amazed it spiked right down to my stop, then right back up. My broker is RJO'brien, I can't imagine such a highly respected company would do something like that. I've heard of "stop hunting" before...but, I've never really been convinced it's as common as some say.

I guess I just need confirmation that I'm just being a little paranoid
I have been trading currencies for 5 years, and I run into this probem quite a lot. Therefore, if I am in front of the computer and watch my trade then I am not entering my stop loss level and if it hits then I pull the trigger by entering market order. If you enter your stop loss order and the market is within 5-10 pips to that, I can assure you that their (most brokers) system will catch you even it is not the market price. If possible (as I am trading for living and not day trading it is possible for me most of the time) do not enter your stop loss orders and do not show your hand.
Agree with that !

I have 3 feeds.

Lets say I am long and have a mental stop (where I want to exit) at 1.8063. I will place an automated stop below by 3/4 pips.

I watch all feeds, once they approach the mental stop. If my broker is on 63 but the other two are on 64 and 65, I will not exit as it is likely my broker will snap back with the others.

If one of the others goes to 62 and my broker is on 64, I might exit at 64 and save a pip.

This of course also works with limit / OCO's to take profit, as well.
Welcome in the middle of the sharks !

Of course Market makers and brokers stop hunt ! And there is nothing wrong with that ! - you tell them at what price you are prepare to sell (or buy) fair enough they accept it –

Never forget that Forex is not a regulated market, it is pear to pear one.

NO and I do repeat NO big position traders will put a stop on any system it is just like advertising the world of your strategy and will inevitably attract them. This attraction is proportional to your position size and inverse proportional to your broker market capital.

2 solutions :

- Do not put stops (or limits order)

- Get or make a system on your local computer where your orders and stop do stay. It is your computer that will send them to the market as Buy or sell order when needed (this is the pro way of life !)
Quoting SouthernFried
Thanks guys. RJO's tech support is closed right now, and I'm told that's who I need to talk to. Gotta get a screen shot, etc...which is all new to me, so this will give me some time to figure it out.

My stop on cable happened at 21:53 GMT time. My sell stop was at 1.8014 (I was going long). The closest my other two feeds got to my stop, was 1.8016 (about 15 minutes later)...and neither of them reached 1.8014...and both are around 1.8030 at this time.

Sorta irritating, cuz I woulda made my measley 10 pips if I hadn't got stopped out.

Oh well, time to see what kinda response RJO gives me.

Thanks for advice.

SF
Hi,

I'm on fxsol. They came down to 1.8016 in 5 min bars at 17:00 and 17:05 their charts (translates to 2300 UK time actually GMT+1 summer time ). Fits in with what you say.

Regards
Alan
Brokers love tight stops.

Iam currently in talks with an ex-employe of a brokerage firm.
We are currently making a "list" of what brokers do on the inside.

Let me know if you think that this is something of interest to you.
Thanks for all the responses.

FireHorse...it's good to get another verification of price action at that time. That now makes 3 feeds that never got to that price, at that particular time. So far, only my broker got to my stop. Gives me a little more confidence when I talk to them about it. If I could find any other feed that reached my stop, at that time...I would not be as concerned. So far, I have found none.

I don't always use automated stops/limits, most the time I am at the computer and just do these things manually. This is the first time I've really noticed something like this with an automated stop, and it was sorta amazing. I saw it happen in real-time. A spike from 1.8019...right to my stop at 1.8014. My jaw dropped.

Anyway, I'm still sorta hoping someone had that same price action, at the same time. If I could just find one other feed that did the same thing, I would feel much better about RJO.

Also, thanks for the invaluable information about "not" putting stops on your system for the world to see. It does make sense. No course I've ever taken mentions anything like this. I never even considered it an issue. In fact, every course I have taken states "Always put a stop on." It's like a commandment or sumthin'. I guess some things can only be learned "on-the-job."

As for as getting "inside" information on how brokers actually operate...I don't know about the more experienced traders here, but for someone like me, I think it would be invaluable. It's something I have been completely unaware of, and just assumed it was fairly straightforward. I think I need to educate myself a little more on this aspect of trading.

Appreciate all the help.
SF
Ok, talked to my broker, and this is the information I recieved.

First of all, evidently, I could have called them right away. My information on talking to the tech support (whom are the only people I have talked to until now), was incorrect. Any trade disputes are always directed to the "dealing desk," which is open 24 hours. This is probably obvious to most traders, but, being the newb I am...I simply didn't know. Didn't even have a number for them. I'd called Tech Support many times, and they were the ones that had handled everything for me before.

Well, now I know...and now I have a coupla new numbers on my rolodex

Second, they told me I need to call immediately, when the trade is happening. This would enable them to see if they are in line with the market (I was told they would call other banks to confirm)...at that time they could make a decision and choose to let me back in or not. I was told he might have gotten me back in if none of his other information corresponded to RJO's price.

Thirdly...as far as price variations from my different feeds. It seems he was willing to accept a 2-5 pip variation in price as being acceptable, at any given time. If I had called at the exact moment I got stopped, there would have been a 5 Pip difference between RJO's feed and my other two...that seems "acceptable" to them. Whether he woulda gotten me back in on that basis, seems up for debate.

I have also been noting a fairly consistent price difference between RJO and my other feeds. 2-3 Pip difference's seem extremely common. Sometimes its 2-3 Pips lower, sometimes 2-3 Pips higher. Which, when I think about it...is actually a 4-6 pip swing in price variations. Seems like a quite a bit of maneuvering room.

I mentioned this to him, and he thought this was within acceptable limits, given normal computer lags and the speed with which the market can move. And that does make sense...it would seem impossible to have perfect synchronization. Still, I notice this price variation at all times...fast, slow, stagnant. To this, he said that if RJO's price was different than the markets, savvy traders could take advantage of that price variation. That too, makes a lotta sense.

So why don't I feel assured?

I don't know. But, I have a new awareness of this "broker" aspect of trading that I didn't have before. And the fact that my broker's price is more consistently at variance with other prices does concern me. It may be overeacting...but, I'm probably gonna deal with my concern, by trying another broker.

FXInterbank and FXSOL come to mind. I hear they are not Market Makers and have less personal stake in seeing people stopped out. Whether this is true or not, I'm not sure...but, their spreads are lower anyway, so it's probably worth the move for that reason alone.

Anyway...I've learned quite a bit from this. Mostly newbie stuff, that most others already knew, I'm sure...but, maybe someone else has learned a little from it as well.

Again, thanks for all your input and advice.
SF
Quoting SouthernFried
Ok, talked to my broker, and this is the information I recieved.

First of all, evidently, I could have called them right away. My information on talking to the tech support (whom are the only people I have talked to until now), was incorrect. Any trade disputes are always directed to the "dealing desk," which is open 24 hours. This is probably obvious to most traders, but, being the newb I am...I simply didn't know. Didn't even have a number for them. I'd called Tech Support many times, and they were the ones that had handled everything for me before.

Well, now I know...and now I have a coupla new numbers on my rolodex

Second, they told me I need to call immediately, when the trade is happening. This would enable them to see if they are in line with the market (I was told they would call other banks to confirm)...at that time they could make a decision and choose to let me back in or not. I was told he might have gotten me back in if none of his other information corresponded to RJO's price.

Thirdly...as far as price variations from my different feeds. It seems he was willing to accept a 2-5 pip variation in price as being acceptable, at any given time. If I had called at the exact moment I got stopped, there would have been a 5 Pip difference between RJO's feed and my other two...that seems "acceptable" to them. Whether he woulda gotten me back in on that basis, seems up for debate.

I have also been noting a fairly consistent price difference between RJO and my other feeds. 2-3 Pip difference's seem extremely common. Sometimes its 2-3 Pips lower, sometimes 2-3 Pips higher. Which, when I think about it...is actually a 4-6 pip swing in price variations. Seems like a quite a bit of maneuvering room.

I mentioned this to him, and he thought this was within acceptable limits, given normal computer lags and the speed with which the market can move. And that does make sense...it would seem impossible to have perfect synchronization. Still, I notice this price variation at all times...fast, slow, stagnant. To this, he said that if RJO's price was different than the markets, savvy traders could take advantage of that price variation. That too, makes a lotta sense.

So why don't I feel assured?

I don't know. But, I have a new awareness of this "broker" aspect of trading that I didn't have before. And the fact that my broker's price is more consistently at variance with other prices does concern me. It may be overeacting...but, I'm probably gonna deal with my concern, by trying another broker.

FXInterbank and FXSOL come to mind. I hear they are not Market Makers and have less personal stake in seeing people stopped out. Whether this is true or not, I'm not sure...but, their spreads are lower anyway, so it's probably worth the move for that reason alone.

Anyway...I've learned quite a bit from this. Mostly newbie stuff, that most others already knew, I'm sure...but, maybe someone else has learned a little from it as well.

Again, thanks for all your input and advice.
SF
Trade also with towo of the others. But don't forget this broker. If you notice any such large differences between this broker and your other brokers. Just use the opportunity to gain some pips that they offer. Become a savvy trader yourself!
Hi,
Quoting SouthernFried
I have also been noting a fairly consistent price difference between RJO and my other feeds. 2-3 Pip difference's seem extremely common. Sometimes its 2-3 Pips lower, sometimes 2-3 Pips higher. Which, when I think about it...is actually a 4-6 pip swing in price variations. Seems like a quite a bit of maneuvering room.

I mentioned this to him, and he thought this was within acceptable limits, given normal computer lags and the speed with which the market can move. And that does make sense...it would seem impossible to have perfect synchronization. Still, I notice this price variation at all times...fast, slow, stagnant. To this, he said that if RJO's price was different than the markets, savvy traders could take advantage of that price variation. That too, makes a lotta sense.
There's a thread here about arbitraging and using pip differences brokers to make money. So RJO would be 'useful' to know about then!

Regards
Alan
Quoting SouthernFried
Ok, talked to my broker, and this is the information I recieved.

First of all, evidently, I could have called them right away. My information on talking to the tech support (whom are the only people I have talked to until now), was incorrect. Any trade disputes are always directed to the "dealing desk," which is open 24 hours. This is probably obvious to most traders, but, being the newb I am...I simply didn't know. Didn't even have a number for them. I'd called Tech Support many times, and they were the ones that had handled everything for me before.

Well, now I know...and now I have a coupla new numbers on my rolodex

Second, they told me I need to call immediately, when the trade is happening. This would enable them to see if they are in line with the market (I was told they would call other banks to confirm)...at that time they could make a decision and choose to let me back in or not. I was told he might have gotten me back in if none of his other information corresponded to RJO's price.

Thirdly...as far as price variations from my different feeds. It seems he was willing to accept a 2-5 pip variation in price as being acceptable, at any given time. If I had called at the exact moment I got stopped, there would have been a 5 Pip difference between RJO's feed and my other two...that seems "acceptable" to them. Whether he woulda gotten me back in on that basis, seems up for debate.

I have also been noting a fairly consistent price difference between RJO and my other feeds. 2-3 Pip difference's seem extremely common. Sometimes its 2-3 Pips lower, sometimes 2-3 Pips higher. Which, when I think about it...is actually a 4-6 pip swing in price variations. Seems like a quite a bit of maneuvering room.

I mentioned this to him, and he thought this was within acceptable limits, given normal computer lags and the speed with which the market can move. And that does make sense...it would seem impossible to have perfect synchronization. Still, I notice this price variation at all times...fast, slow, stagnant. To this, he said that if RJO's price was different than the markets, savvy traders could take advantage of that price variation. That too, makes a lotta sense.

So why don't I feel assured?

I don't know. But, I have a new awareness of this "broker" aspect of trading that I didn't have before. And the fact that my broker's price is more consistently at variance with other prices does concern me. It may be overeacting...but, I'm probably gonna deal with my concern, by trying another broker.

FXInterbank and FXSOL come to mind. I hear they are not Market Makers and have less personal stake in seeing people stopped out. Whether this is true or not, I'm not sure...but, their spreads are lower anyway, so it's probably worth the move for that reason alone.

Anyway...I've learned quite a bit from this. Mostly newbie stuff, that most others already knew, I'm sure...but, maybe someone else has learned a little from it as well.

Again, thanks for all your input and advice.
SF

I currently trade with MG Financial Group. Can't afford to have another account with another firm yet, but if I would open another one, I think I will be trying InterbankFX, as their reputation is high among many.

I think you should consider MG in your list. I am not sure if they are market makers or a broker, but what I know that they are better than many other firms, in what way?? I will tell you. The volatility is lower with MG than other firms. This is due to the fact that they don't have too much clients to cause such volatility. In other words, the money moving around makes the price changes there a little bit decent and smooth than others where prices can widen and run up quickly during low volume periods.

I noticed this by watching the feed of FXCM, InterbankFX vs MG, I always noticed that MG feed is the most stable and less volatile than the other 2. The other 2 have a larger customer base, and consequently larger orders and more money moving around, so te volatility is high, and the prices vary between 1-5 pips up or down.

I never experienced any slippage, even though once I was watching the market, my stop was at 1.2305, the price was at 1.2306, and suddenly it dropped to 1.2304 and my stop was triggered. when I checked my account history, I saw that I was filled at my exact stop 1.2305, although I didn't see this price on the screen, that's why I believe that they don't have too much slippage.

Thanks,

Nader
With all this talk of broker manipulation, has anyone tried opening an account with a company that has no deal desk? Such as EFX Group?

The trade off is having to pay commisions but you are also offered very tight spreads and with no deal desk, there is 'suppose' to be no chance for manipulation.
I´ve been trading forex for more than 6 years, options and stocks before...consistent looser...
Luckily I trade risks of cents by now (with Oanda), so I´m still alive and well..
Studied tons of books and courses...best of softwares, put in thousands of trades...
FINALLY I come to understand why it is "almost" imposible.
YES: Brokers and big money, (smart money), and stop hunting is just one strategy, they will not only wipe you out of almost every trade, they will create market patterns designed to lure evryone inside...
They are the players on the table that can see everyones cards...try to beat that...and those excuses about acceptable slippage and computer delays are part of the design..
I must say, I come to "admire" these big boys , they are dammed good, they are so greedy they take everyones money, slowly but surely, but not making it too obvious..
Look, most traders are intelligent folks, some are doctors and professionals, owning companys, etc.....they loose consistently...few are aware of the real odds....
It is NOT a fair game!!!
Position sizing is one of the most important variables in your end results...so they offer you lots, unless you have a million to spare, youré obliged to risk too much, even with mini lots (Oanda is the exception!)..

AND: remember, they not only see your orders, they also trade , AGAINST YOU...(including OANDA)
Reminds me of the case of Goldmann Sachs, there´s a big story about the "morality", of them trading against their clients...They discovered their game after invetigating the financiall meltdown...
They even had them declare in Congress...and they said that their service to their clients is their sacred mission...and gave some cute phony excuses....they probably bribed half of the congressmen to begin with...

Friends, our opponent has VERY BIG TIME MONEY, and they want ALL your money on top...

Understand these facts, act accordingly ..and maybe........one day you´ll make it...

Don´t ask me for the solution, I wouldn´t be writing this if I knew.. I heard...some folks say volume and spread is a way to read THEIR cards...there´s some truth there...need to become a total expert...

Enjoy life in the meantime...
[quote=SouthernFried;22783]Just in the last 15 minutes I got stopped out of a trade...and I'm a little confused.

I have 3 different live feeds...the only feed that went to my stop, was my brokers. The other 2 feeds did not get to within 5 pips of that number. My brokers feed immediately spiked down to my stop...then went immediately back up to the other numbers, where it is now.

My question is...would they do something so obvious? It doesn't seem like my measley 3 mini's would warrant such an action. I was amazed it spiked right down to my stop, then right back up. My broker is RJO'brien, I can't imagine such a highly respected company would do something like that. I've heard of "stop hunting" before...but, I've never really been convinced it's as common as some say.

I guess I just need confirmation that I'm just being a little paranoid

Don´t get paranoid, just face the facts, youré starting to understand the game.
Stop hunting is just one of the techniques used by "Smart Money", brokers, big trading groups, really Big Boys.They all trade against you and me (yes, including your broker!).
Ever wondered why so many intelligent people loose in this game consistently?
These guys can read everyones orders, they have trained traders whose job is to knock out every single sweet trading system in town....
It´s like sitting in a poker table, where one player can read everyone´s cards!
Understand?
They can see your orders..that gives them a definite edge, which they use as discretely as possible...an silently clean most people´s pockets...
Don´t waste your time complainming to them, they will probably put a nice sweet talking person to explain how worried they are about your problem!
Our only chance is to "somehow" understand and try to read their movements and follow them...
They own the shop!
Wellcome to reality...and good luck...
  • Post #19
  • Quote
  • Last Post: Apr 18, 2011 2:31pm Apr 18, 2011 2:31pm
Quoting mf4x
Welcome in the middle of the sharks !

[color=black]Of course Market makers and brokers stop hunt !...
Totally agree....!!!
Guys, pick any Forex chart, any time frame, with some 50 bars on it, and count the stops hunted on that chart ...it´s right in front of your eyes...people are really inocent, and the "Big Smart Money Boys" love it .
Any profesional trading sistem that does not consider Stop Hunting in the equation (and ways to avoid it..) is bound to fail...it will just eat that little desperate edge we all need..they can read all the cards and have plenty of tools to get that sweet little last pip to sweep everyone away...

And brokers trade against you...as kind and polite as they may sound on the phone, it´s the name of the game......Take it or leave it...
Once this is understood, back to work, but beware the facts!!

Good luck, and don´t let the cat eat you while you are drinking on the little puddle of water....
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