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Stop Hunting

Quoting lavista4u
"CFTC Registered and NFA Member " is what is displayed in bold at CFG site. It's worthless in the long run i guess.

This case is so on and if we battle it out in court on ourselfs, we would win, common we got hardcore proof, what else we need just file the case stock, you have the edge.

Go for it...
Your enthusiasm is noted and welcome, but we probably need to get proof confirming that the price received by stockwet was NOT displayed to any other customer.

I would believe that the proof needed to pursue this would be to get a customer to come forward that had a trade NOT stopped by the move up to the stop price...this would confirm that the feed was manipulated. However, we may have enough proof to bring it before the BBB or even the CFTC for an investigation. I believe the CFTC might be able to do an audit of some sort. Even getting it that far would damage the reputation, and prevent some from being victimized in the future.
Sorry stockwet for what happend.


You (or you friend) can sue them for damages . If I were you I didn't wait for tommorow.

I have same problem with my broker ( in trading the news and fast market movements ) but my trades are very small in campare with 100 lots .
I use Interbankfx. I got in on a 60 pip upswing on EurUSD and I tried to close at the top and it asked, "Are you sure?" . I was like "WTF". This was on a live account, too. I didn't know what to do so I hit cancel and then closed it after 5 more pips had gone down. It didn't ask me the 2nd time, though.
One should be prepared for extreme movements on NFP and other important news releases. 80 pip instaspikes are common. I understand the core complaint of being quoted a price 20 pips out of line but really, 20 pips during such volatility is nothing. Trading 10 million at such time, with either tight stops or high leverage with probability of facing a margin call is nothing but suicide.

Either gamble and enter the trade before the release or then pyramide into the post-release settling action. Post-pyramiding can be very profitable, I remember many times where the initial spike has been around 80 pips, corrected back to 40-60, then went on to settle around 160. Pyramiding in there, starting from the 40-60 level, brings fat profits.

Have anyone here actually read the New Account Contract for CFGTrader? Ive colored the important parts blue :


GFTrader Agreement Contract:
From : http://cfgtrader.com/Content/CFGTraderClientAgreement.pdf

"d) Quoting and Execution Errors:
Should quoting and/or execution errors occur, which may include, but are not limited to, a dealer’s
mistype of a quote, a quote or trade which is not representative of fair market prices, an erroneous price
quote from a Trader, such as but not limited to a wrong big figure quote or an erroneous quote due to
failure of hardware, software or communication lines or systems and/or inaccurate external data feeds
provided by third-party vendors, CFGTRADER will not be liable for the resulting errors in account
balances. In addition, orders must be placed allowing sufficient time to execute, as well as, sufficient time for the system to calculate necessary margin requirements. The execution or orders placed too close
to prices, which would trigger other orders (regardless of order type) or a margin call, cannot be
guaranteed. CFGTRADER will not be liable for the resulting margin call, resulting balance, and/or
positions in the account due to the system not having been allowed sufficient time to execute and/or
calculate accordingly. The foregoing list is not meant to be exhaustive and in the event of a quoting or
execution error, CFGTRADER reserves the right to make the necessary corrections or adjustments on the
account involved. Any dispute arising from such quoting or execution errors will be resolved by
CFGTRADER in its sole and absolute discretion. Trader agrees to indemnify and hold CFGTRADER
harmless from all damages or liability as a result of the foregoing.

7. In OTCFX, firms are not restricted to effect exchange transactions. The firm with which you deal,
such as CFGTRADER may be acting as your counterparty to the transaction. It may be difficult or
impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the
exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange
transactions may be less regulated or subject to a separate regulatory regime. Before you undertake such
transactions, you should familiarize yourself with applicable rules and attendant risks. "


FXCM's Agreement Contract:
http://www.fxcm.com/docs_pdfs/trading_agreement.pdf
Quoting oedipean
Sorry stockwet for what happend.


You (or you friend) can sue them for damages . If I were you I didn't wait for tommorow.

I have same problem with my broker ( in trading the news and fast market movements ) but my trades are very small in campare with 100 lots .


Sorry To dissapoint, but nobody will be suing anybody im afraid .
Quoting ShaderZ
Sorry To dissapoint, but nobody will be suing anybody im afraid .
It dosent cost a firtune to sue someone in USA. It can be a small investment which will definately bring fame if not fortune to the person suing.

If I had been a resident of US I would have definately sued the company like this.

I have Vice President of comapnies asking me to manipulate (sorry SKEW prices) to force clients into looses. If anyone decides to file a small application against such injustice; I will be willing to share the email with them.

People can sue for Cofee being too hot, but not this!
ShaderZ,

I think you are probably right. However, consider for a moment the situation in which the quoting was not "erroneous". Suppose, for example, that the "mis"-quote was purposeful and, suppose further, that the counterparty in the transaction was the broker.

The agreement covers CFGTrader for errors in quoting, it does not cover them for purposeful price manipulation. A competent attorney would have no trouble getting through this agreement. But, that's why I originally stated that this will likely start with the State Attorney's General office. I think a thorough examination of what happened may reveal some interesting additional details. We'll see what can be done.

In any case, you can bet that not a soul who reads this forum will use CFGTrader. You can also bet that there will be other posts that show up on other forum sites should CFGTrader desire to advertise to grow their business. So, either way, whether my friend gets his money back or not, I think CFG has damaged their reputation significantly.

Regards,

stockwet.

Quoting ShaderZ

Have anyone here actually read the New Account Contract for CFGTrader? Ive colored the important parts blue :


GFTrader Agreement Contract:
From : http://cfgtrader.com/Content/CFGTraderClientAgreement.pdf

"d) Quoting and Execution Errors:
Should quoting and/or execution errors occur, which may include, but are not limited to, a dealer’s
mistype of a quote, a quote or trade which is not representative of fair market prices, an erroneous price
quote from a Trader, such as but not limited to a wrong big figure quote or an erroneous quote due to
failure of hardware, software or communication lines or systems and/or inaccurate external data feeds
provided by third-party vendors, CFGTRADER will not be liable for the resulting errors in account
balances. In addition, orders must be placed allowing sufficient time to execute, as well as, sufficient time for the system to calculate necessary margin requirements. The execution or orders placed too close
to prices, which would trigger other orders (regardless of order type) or a margin call, cannot be
guaranteed. CFGTRADER will not be liable for the resulting margin call, resulting balance, and/or
positions in the account due to the system not having been allowed sufficient time to execute and/or
calculate accordingly. The foregoing list is not meant to be exhaustive and in the event of a quoting or
execution error, CFGTRADER reserves the right to make the necessary corrections or adjustments on the
account involved. Any dispute arising from such quoting or execution errors will be resolved by
CFGTRADER in its sole and absolute discretion. Trader agrees to indemnify and hold CFGTRADER
harmless from all damages or liability as a result of the foregoing.

7. In OTCFX, firms are not restricted to effect exchange transactions. The firm with which you deal,
such as CFGTRADER may be acting as your counterparty to the transaction. It may be difficult or
impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the
exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange
transactions may be less regulated or subject to a separate regulatory regime. Before you undertake such
transactions, you should familiarize yourself with applicable rules and attendant risks. "


FXCM's Agreement Contract:
http://www.fxcm.com/docs_pdfs/trading_agreement.pdf


Source: http://www.elitetrader.com/vb/showth...&pagenumber=12

Quoting igor123
Years ago I myself traded with FXCM but that was due to lack of information on other brokers.
If you remember straddling the news with guaranteed fills in 2003-2005, then I can tell you what FXCM did: seconds after the numbers were released and say the EUR/USD gapped up 70 pips FXCM had a 30 pip spike down that of course could not be found anywhere else just to trigger sell order, another thing sometimes when somebody would make dissent money(5-20k) they would just cancel your gains and say "there was a lag in our feed, so the quotes you were trading on have not existed). There are many more stories about that "honest" broker.
Heres a piece of that contract form CFGTrader:
CFGTRADER reserves the right to make the necessary corrections or adjustments on the
account involved. Any dispute arising from such quoting or execution errors will be resolved by
CFGTRADER in its sole and absolute discretion. Trader agrees to indemnify and hold CFGTRADER
harmless from all damages or liability as a result of the foregoing.

But they are two different brokers you say!!...not really... From what i understand ( and if you look at their new account contract ) Seems like CFGTrader is nothing but an Introducing Broker for FXCM... woopiee.... Btw... In case anyone reading this is too lazy to read the two contracts frrom FXCM and CFGTrader.... Their almost identical. SO....Mr. Stockwet.... Even if your friend didn't get stop hunted, His broker ( Bucketshop ) wouldn't hesitate to exercize their liberty of.... making corrections or adjustments
due to a....lag in their feed.
Dont you all just LOVE Forex?....

I realzie that i may sound like an assh@le but in all honsety... Im just upset at ALL of these dishonest brokers. Im begining to think that there isnt a single honest retail broker out there.... If there is, could someone PLEASE tell me which ones they are?

In the agreement contract regarding an erroneous price, it dosnt specify
whether if there's intent involved on the broker's(bucketshop's) part or
not. It just states that if there is an error in the price feed that
your friend ( Trader ) relieve them of any responsability for any wrong
doing regardless if there was intent involved.

Keep in mind i'm not an attorny nor am i trying to come off as one.( People always state that to cover their arse legally...plus it makes them sound liek a profesional ) This is just my 2 cents and gut feeling of what the outcome would be should you go after them legally. It seems to me that these Bucketshops have their asses covered. From what i understand in this contract....they can basically do whatever they wish to your account and you...cant do anything.

One Last note.... Ever wonder why bucketshops hate....LOATH...DISPISE skalpers? Some people say, " But they make money on the spread....and scalpers trade alot .... so that must mean more money for the bucket shops... excuse me...."brokers". Why o why wont they let me SCALP!!??...

....because a scalper is quick...so quick in fact.... that the broker dosnt have enough time to manually manipulate the scalper's price feed in their favor ( the "brokers" favor that is). So what happens when your profiled a scalper?....hehe....I think we all know what happens. My wrists are starting to hurt so i'll stop my little rant.
ShaderZ,

Your point would be valid, and I stated previously, the only way legal action would be successful would be if we could prove that Stockwet's feed was the only one manipulated. If a CFGTrader customer would come forward who did NOT have the same pricing, then we could claim prejudice...it would be one thing to have erroneous information on the entire client base, but it would be really easy for this to come before a judge in conspiracy to commit fraud because the contract dispute probably doesn't cover them for individual errors...remember, the STOP was on THEIR server, so if the feed was manipulated for one person, it should have been manipulated for ALL of their clients...

Contracts never cover fraud...and proof of a mishap in one feed should be more than enough evidence to take them to court.

If what you said is correct, and CFGTrader were an IB for FXCM, we all know that FXCM provides an interface for "bending" the price a little...but 20 pips higher than the feed would make it more than obvious, which is why this case probably has more legs to stand on than normal.

If it were 1 or 2 pips, it would be easy to brush it off...but 20?? At WORST case, they can be reported to the BBB...which would do more than enough damage, really.

Like stockwet said, he doesn't know what the probability is of winning a legal case would be...but he sure can exercise his first amendment and inform the public of possible fraud.
Quoting mrmikal
Your point would be valid, and I stated previously, the only way legal action would be successful would be if we could prove that Stockwet's feed was the only one manipulated.
Well, that's not really true. Remember, the contract that was posted is an adhesion contract. Adhesion contracts are "take it or leave it" contracts that you sign with merchants for products or services such as credit card contracts. The contract you sign when you open up a blockbuster acct is an adhesion contract.

These are necessary for commerce, but the courts have basically said that even though they're necessary that doesn't give merchants the right to bend people over, especially because the other party has no ability to negotiate the terms of the contract. So, courts will hold a contract like this to much harsher standards of fairness.

This contract basically gives them the right to do whatever they damn well please and you'd probably have a relatively decent chance in court.
Quoting Far From Average
Well, that's not really true. Remember, the contract that was posted is an adhesion contract. Adhesion contracts are "take it or leave it" contracts that you sign with merchants for products or services such as credit card contracts. The contract you sign when you open up a blockbuster acct is an adhesion contract.

These are necessary for commerce, but the courts have basically said that even though they're necessary that doesn't give merchants the right to bend people over, especially because the other party has no ability to negotiate the terms of the contract. So, courts will hold a contract like this to much harsher standards of fairness.

This contract basically gives them the right to do whatever they damn well please and you'd probably have a relatively decent chance in court.
Excellent point...and even better news...I thought this in the back of my mind, but I wasn't sure there was legal precidence (at least not a particular case I was aware of) for this...but you're absolutely right...I know this to be somewhat true in regards to leasing and rental agreements. Most courts side with renter when contracts are too broad and too stiff. Non-negotiable contracts are, in essence a form of implied coersion since there is a reasonable expectation of fairness. In this particular case, you're right...stockwet got bent over and spanked, so I'm sure a judge would be willing to look at this...this contract is the financial equivalent of signing a contract that says "I fully expect not to rape you, but if I do, I can't be held legally responsible...especially since I'm listening to other voices anyway".
I heard that sometimes if the case is too strong against a firm, with good chance of getting a penalty; than law firms/independant lawyers fight the case for free. They call it 'proborno' or something.
Quoting mrmikal
ShaderZ,

Your point would be valid, and I stated previously, the only way legal action would be successful would be if we could prove that Stockwet's feed was the only one manipulated. If a CFGTrader customer would come forward who did NOT have the same pricing, then we could claim prejudice...it would be one thing to have erroneous information on the entire client base, but it would be really easy for this to come before a judge in conspiracy to commit fraud because the contract dispute probably doesn't cover them for individual errors...remember, the STOP was on THEIR server, so if the feed was manipulated for one person, it should have been manipulated for ALL of their clients...

Contracts never cover fraud...and proof of a mishap in one feed should be more than enough evidence to take them to court.

If what you said is correct, and CFGTrader were an IB for FXCM, we all know that FXCM provides an interface for "bending" the price a little...but 20 pips higher than the feed would make it more than obvious, which is why this case probably has more legs to stand on than normal.

If it were 1 or 2 pips, it would be easy to brush it off...but 20?? At WORST case, they can be reported to the BBB...which would do more than enough damage, really.

Like stockwet said, he doesn't know what the probability is of winning a legal case would be...but he sure can exercise his first amendment and inform the public of possible fraud.
I thought I had mentioned in my update thread that we do indeed have another CFG customer who had a different feed on their live account.
Quoting stockwet
I thought I had mentioned in my update thread that we do indeed have another CFG customer who had a different feed on their live account.
I must have missed that, stockwet...sorry...looks like you've got solid ground. Let us know if you need any help.
Goodluck Stockwet, I'll be hoping for the best.
Hello all!
I am so thankful that i found this forum.
I began trading the forex about two months ago. I was highly successful on my demo account. Then, i went live. Whew, what a difference. I thought that i must be going crazy because i made about twenty trades and they all deflected away from where i predicted. Then i got stopped out twice within 1 pip on two different occasions-and i had puposefully set my stops very wide. It was amazing. The candlesticks marched right down to my stop then shot right back up in ways which did not occur on other brokers charts. It was so blatant that i started researching and ended up here. I just want to reaffirm what you are reporting with stop hunting and manipulation. It is awful. I am pretty much convinced that scalping cannot work in this environment and trading with stops is a death sentence. It's sort of like playing poker and showing everyone at the table your hand, but you cant see theirs.

Now, i am curious about ways to fight it.
For example- could we
Put in a larger limit buy order 1 pip above the stop? So the MM would actually risk loosing more by hunting/triggering the stop
Going long with no stops at all
What is the solution for those of you who know what i am talking about exists? With good analysis it would seem like a pretty good way to go.
The data cannot be manipulated as much in the long term game
Quoting pfredricks
Hello all!
I am so thankful that i found this forum.
I began trading the forex about two months ago. I was highly successful on my demo account. Then, i went live. Whew, what a difference. I thought that i must be going crazy because i made about twenty trades and they all deflected away from where i predicted. Then i got stopped out twice within 1 pip on two different occasions-and i had puposefully set my stops very wide. It was amazing. The candlesticks marched right down to my stop then shot right back up in ways which did not occur on other brokers charts. It was so blatant that i started researching and ended up here. I just want to reaffirm what you are reporting with stop hunting and manipulation. It is awful. I am pretty much convinced that scalping cannot work in this environment and trading with stops is a death sentence. It's sort of like playing poker and showing everyone at the table your hand, but you cant see theirs.

Now, i am curious about ways to fight it.
For example- could we
Put in a larger limit buy order 1 pip above the stop? So the MM would actually risk loosing more by hunting/triggering the stop
Going long with no stops at all
What is the solution for those of you who know what i am talking about exists? With good analysis it would seem like a pretty good way to go.
The data cannot be manipulated as much in the long term game
Let's work on the premise that Scavenging Brkers do exist.
How would they set up such a structure as Stop Hunting.

Well...
Firstly they would want to attract clients that they could trap.
So, define those Clients.

Clients,
Need to place Stop Loss Orders because they cannot Watch the Market All Day. {they have to "Show their Hands"}

There has to be sufficient stops at a given level to warrant moving the market. {so watch "all the usual suspects" for accumulation, 38%... Prev Hi/Lo... R1,R2...}

Stops have to be close enough to current market to manipulate that market without drawing undue attention.
Therefore they should have limited Funds to ensure the Stops are near current market. So make sure that they can open an account with a small deposit. {add incentives and make it sound easy}
-----
I'm sure this very short list could be added to by others but,
my solution is...
Just don't "Show your Hand"

I'm not saying don't use Stops. They are absolutely 100% neccessary.
What I am saying is Trade Only When You Can Watch The Market so you don't have to stand on the table screaming "I have a pair of 2's".
{Position Trading is obviously a different beast that cannot be watched 24/6}

Check the Method you are using to Calculate Your Stop. {If you are using Previous Day Hi/Lo you are a Prime Target even if you do not show Your hand Lots of others will.}

Here comes the tough part.{the mental/discipline part of trading}
After you have decided where your stop should be, watch the Market and If It Hits It, Get Out @ Mkt. No second guessing, No re-evaluating. Nothing. Just Get Out.

Question for the longer than 5 years trading gang.
When you get stopped out, do you...the majority of the time...

1) Feel you were Hunted?

2) Feel better out than still in?

3) Feel you miss-calculated your Stop?

I'm betting {oops I mean Speculating} the majority will answer #2
I am not at all phased by any stop hunts (is what generally feeds the market - your money) because I do not set stops. Happily so too, just trade very sensible size positions and am never forced to have to close out. Usually I don't either, as in all in all 99% of my trades end up positive.

You have to ask yourself if you traded stocks as an investor, you bought at lets say 98 and it went down to 94... would you panick, no of course not if you traded sensibly and not get seduced by this high leverage that is offered.

Do you think that a large fund, say 100m in size is going to trade 100-1 on margin. If you think so then you need a head check.
you should definitely take it to court or at least small claims court if you can prove that you were targeted an another member was not.
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