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Sophisticated "anti-stop hunting" technique

  • Post #1
  • Quote
  • First Post: Sep 3, 2007 5:51pm Sep 3, 2007 5:51pm
Hello. Two anti-stop hunting ideas for you to consider:

1)

Just had this idea the other day.... think it's worth presenting. Now those of us that code EAs know that we can generate our own log files. (with FileOpen())

So I was thinking that if you had multiple brokers running simultaneously, you could use them as a sort of "check and balance" system.

What you would do is write to the text file if/when a large spike occured w/ one of your brokers. The other MT4s running on the other brokers would be polling this log file, and consequently be able to check THEIR price streams for the same spike.

What you do from there is your own choice.

2)

The second idea is not my own, but maybe some of you haven't heard of it. Instead of including the SL and TP w/ your order, you can simply exit the trade as it hits the TP or SL with the OrderClose() command.

Now by combining the two techniques, you could effectively determine a stophunt w/ step (1), and then hold the position until the price returned.
Quoting tdion
Hello. Two anti-stop hunting ideas for you to consider:

1)

Just had this idea the other day.... think it's worth presenting. Now those of us that code EAs know that we can generate our own log files. (with FileOpen())

So I was thinking that if you had multiple brokers running simultaneously, you could use them as a sort of "check and balance" system.

What you would do is write to the text file if/when a large spike occured w/ one of your brokers. The other MT4s running on the other brokers would be polling this log file, and consequently be able to check THEIR price streams for the same spike.

What you do from there is your own choice.

2)

The second idea is not my own, but maybe some of you haven't heard of it. Instead of including the SL and TP w/ your order, you can simply exit the trade as it hits the TP or SL with the OrderClose() command.

Now by combining the two techniques, you could effectively determine a stophunt w/ step (1), and then hold the position until the price returned.
i think its easier to get the setup right, and not complain when one gets stopped out
With a break always expect a pullback, otherwise, you're dead meat/
3)

Don't place your stop 10 pips away from the market and confuse noise with stop hunting.
Tell that to the guy that has a 50 pip spike go against him. This is more for people that use tight stops (say, 30 or 40)

Quoting ghitz
i think its easier to get the setup right, and not complain when one gets stopped out
Thanks for your insight, Phil.

Phil and I have disagreed in the past, but he has more than proven his validity to me w/ posts like this:

http://www.forexfactory.com/showpost...06&postcount=5
http://www.forexfactory.com/showpost...&postcount=134

Keep them coming.
  • Post #6
  • Quote
  • Edited at 8:07pm Sep 3, 2007 7:11pm | Edited at 8:07pm
Quoting tdion
Tell that to the guy that has a 50 pip spike go against him.
That happened circa 2004. It doesn't happen today but the legend lives on. If it did surely someone would past a chart for our viewing pleasure.

As a former submariner, I appreciate your reference in your signature line. We have disagreed on occasion but I think that's healthy. There is a saying that says: "those who agree with me are unnecessary."
  • Post #7
  • Quote
  • Edited at 8:03pm Sep 3, 2007 7:46pm | Edited at 8:03pm
I have respect for you, Phil, but let's not start a fight.

Quoting philmcgrew
There is a saying that says: "those who disagree with me are unnecessary."
Phil makes a good point about "market noise" in post #3. In this link, we see about a 17 pip spike before news:

http://www.forexfactory.com/showthread.php?t=5289

Now I believe that applying the technique described in post #1 could protect someone in many instances, such as the one stockwet describes. As for 50 pip spike examples, let's remember that a lot of spikes aren't going to be reported to the boards. I guess it really depends on whether you believe they happen anymore.
Quoting tdion
In this link, we see about a 17 pip spike before news:

http://www.forexfactory.com/showthread.php?t=5289
Please, that's not a stop hunt. That same spike occurred on a variety of brokers including TradeStation. Did they all convene before the announcement and conspire to show false quotes? Did they all convene before the announcement and conspire to show false quotes? That spike represents an increase in volatility on what most consider one of the top economic announcements of the month/year. Generally, movement within 3 ATR is consdiered noise, that spike barely made it past 1 ATR.
Bah. The technique would have saved a few trades.

http://www.forexfactory.com/showpost...9&postcount=12
http://www.forexfactory.com/showpost...3&postcount=14
http://www.forexfactory.com/showpost...53&postcount=9
ok there are two different types of stop hunts here. If you are talking about preventing yourself from being stopped out by your broker then switch brokers. If the broker is manipulating the price by 20-50 pips and not reversing this when you contact them, it is you fault for remaining with that broker. And a broker who is consistently manipulating prices by a margin of 20-50 pips is exposing themselves to disaster.

If you are talking about actual stop hunting by institutional players well

Quoting Darkstar
As a professional stop hunter I can assure you that your decision to enter a stop loss order doesn't make the slightest difference in determining whether you will be smoked out of your trade or not. If you are a technical trader people like myself know EXACTLY where your stop is, mental or otherwise.

Failing to enter a physical stop order will only serve to tempt a trader to break his/her rules.
my point being if you are trying to safeguard yourself against a broker that you think is manipulating price by 20pts or something that large(i am not talking about 1-2 pips here), it is just your fault for staying with them if this is happening enough where you feel you need a strategy to protect against bogus spikes.
I removed My last post, because I honestly cannot remember how the case was resolved and do not want to give false information...
Excellent post, Mike. I don't know how often these broker spikes occur, but have read several complaints about them throughout the years. The technique was just an idea, and I was just trying to be helpful.

Quoting mbqb11
ok there are two different types of stop hunts here. If you are talking about preventing yourself from being stopped out by your broker then switch brokers. If the broker is manipulating the price by 20-50 pips and not reversing this when you contact them, it is you fault for remaining with that broker. And a broker who is consistently manipulating prices by a margin of 20-50 pips is exposing themselves to disaster.
Quoting tdion
Excellent post, Mike. I don't know how often these broker spikes occur, but have read several complaints about them throughout the years. The technique was just an idea, and I was just trying to be helpful.
I understand, I know you were, but a lot of the new people think stop hunting is this inner broker conspiracy and that they are getting stopped out only due to it(when like phil said a lot of times it is noise). IF you do experience a weird spike(after researching other data feeds), contact your broker figure out if it was a legit spike(or so they say), this happens at Oanda, and they are really good about fixing it(bad data feed). 20pts off market price is extremely high(let alone 50), and if your broker is doing that, it's time to switch(if they aren't reversing this). I am not saying brokers dont push prices sometimes, but 10,20,50 pts is a lot, and you shouldn't be safeguarding against that, you should just be pulling your $$ out.

Thanks T
Mike
When you look at two or more price histories from brokers the difference can be astounding. The edge brokers have of course is the widening spreads. Probably impossible to gauge from history. Thats when the stops are taken out.

I agree with the original post. I don't even plot my indicators on the screen I am trading from but from a demo account with a different broker. I have gone through stages where I sometimes don't even know if its worth it, watching the bid line snake through the screen with the ask line staying put. If thats not stop hunting I don't know what is. I am not a conspiracy theorist by any stretch but I am not naive either.I do know there are a lot of crooks out there.

"People get funny when it comes to money". I always wondered why you have to push a button to activate EA's in Metatrader.
"Its not where your at, but where your coming from"
Suppose this really does happen. Suppose you have ECNs and Market Makers streaming quotes side by side on your desktop. If one of them jolts away 10 pips from all the others, wouldn't it be a safe bet to execute a trade on that lone wolf?

Such a system would give a broker a dose of his own medicine.

Quoting tdion
Hello. Two anti-stop hunting ideas for you to consider:

1)

Just had this idea the other day.... think it's worth presenting. Now those of us that code EAs know that we can generate our own log files. (with FileOpen())

So I was thinking that if you had multiple brokers running simultaneously, you could use them as a sort of "check and balance" system.

What you would do is write to the text file if/when a large spike occured w/ one of your brokers. The other MT4s running on the other brokers would be polling this log file, and consequently be able to check THEIR price streams for the same spike.

What you do from there is your own choice.

2)

The second idea is not my own, but maybe some of you haven't heard of it. Instead of including the SL and TP w/ your order, you can simply exit the trade as it hits the TP or SL with the OrderClose() command.

Now by combining the two techniques, you could effectively determine a stophunt w/ step (1), and then hold the position until the price returned.
Interesting....
Does anyone here have any actual evidence of "Stop Hunting" ?

The pricing from broker to broker, Ecn to Ecn, or trader to trader is always going to have some differences. Nobody is required to use price matching and every deal has a counter party. I guess that I just dont see the point of this technique. I would really appreciate if someone could provide actual evidence of something like this, because I hear allot about it but find it hard to believe.

Dont want to hear another story about someone who shorted the EURUSD last month and lost 250 pips, then tries to blame it on the broker.
-You lost because you went the wrong way in the trade.
Keep it simple stoopid....
well perhaps a moth ago we had a situation where there was a difference of 75+ pips on the GBP/JPY respect to every other brokers we could get data from for that specific candle - ok it's a crosspair - however no other broker we checked had this...on the phone the brokers' reps justified it as their spread...

was it a stop hunt....?

I'll leave that up to everyone to decide on a personal basis.
Nihil inimicus quam sibi ipse Marcus Tullius Cicero
Suppose you had two brokers....

You went long 5 lots on each at the exact same price.....

you also went short 5 lots on each at the exact same price....

You wait until the price of 1 long is 5 pips above the other long, and exit....

You also wait until the price of 1 short is 5 pips below the other short, and exit....

So your profit comes from the difference in broker feeds.... an arbitrage of sorts....

The orders would need to be filled at the exact price on each broker.... spreads need to be tiny (EURUSD ECNs maybe?)

It's the same idea as my original post 1, just more definitive.
  • Post #20
  • Quote
  • Last Post: Jan 3, 2008 7:23am Jan 3, 2008 7:23am
HI all,
This is really not about stop hunting but I was hoping someone here could help me with a little trouble I am having. This happened to me on my one machine and now another. I am using MT4 with ODL Securities Live account and now when I right click on the chart and select "object list" my terminal freezes. What is the problem? I don't really want to select every fib and line at a time to delete them and object list was coming up every time until now.

Any help would be appreciated.

Daniel
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