I have found out that if my position hits SL, I should reverse my position. That way I will make lots of money.
Stop Hunting 274 replies
Stop Hunting 11 replies
Stop hunting broker, do not use! 21 replies
Stop Hunting? 18 replies
DislikedDB,,
I see that most of the posts have missed your actual point.
Dark says he goes after stops, but I wonder? I mean He cant move the market, so he (if he is telling the truth about it) must have an idea what the marketmakers are thinking/doing. If that is true. How does he know?
As far as that investopedia link goes by Boris S. I must have read it 4 or more times in the past. I simply think his explanation is not actually describing targeting stops well enough for (us) me to make use of it.
It doesnt use the typical example that you describe and that the chart posted above so graphically depicts.
I would like to see more on stop hunting as a trading tactic.
LouIgnored
DislikedDB,,
I see that most of the posts have missed your actual point.
Dark says he goes after stops, but I wonder? I mean He cant move the market, so he (if he is telling the truth about it) must have an idea what the marketmakers are thinking/doing. If that is true. How does he know?
As far as that investopedia link goes by Boris S. I must have read it 4 or more times in the past. I simply think his explanation is not actually describing targeting stops well enough for (us) me to make use of it.
It doesnt use the typical example that you describe and that the chart posted above so graphically depicts.
I would like to see more on stop hunting as a trading tactic.
LouIgnored
DislikedWell, I was thinking it over and got some ideas, but I dont know how valuable they are, I guess they would need some testing.
First of all come situations when price ranges in a channel of 10-20 pips (like yesterday afternoon Eur/Usd, Gbp/Usd and possibly other pairs). When price ranges, amount of short orders is equal to amount of longs, so we can assume that stop losses are equally distributed on the both sides of the channel and from my own experience this stoplosses are quite close to the borders (2-10 pips). Also there is a number of limit orders there from people waiting for a breakout. So, we can assume (again) that big players will try to get these orders/SLs triggered and most likely they will try to collect them from both sides of the channel. If you look at today's price action, price first moved down, triggered orders and stop losses, then moved up, collected orders there also and now it is finally on a real move down. At least thats how I can explain this behavior. If it happens always like that we also can easily use this pattern.
Actually what I just said is very similar to fxprocessor idea.
I think a good way to see where stop losses are is to look at histograms from trade station which TheDownRiverTrader uses for his River theory.Ignored
DislikedYou've brought up some good points.
Traders looking for a breakout put stop orders on each side of a range. Buy stops above, sell stops below.
Another method is to put limit sells above, and limit buys below. This works on the idea that the market will hit it then return to the original price level.
Alex Elder points it out well in "Trading for a Living". In a trend, you obviously buy strength or sell weakness. In a ranging market, you buy weakness and sell strength.
Now, how would this apply? In a ranging market, I think we can say that traders with open positions are either looking for a scalp, or a breakout. The latter group are wrong if it's still ranging. This is where I was yesterday, my system said take a short trade, but it's a trend following system. So I got stopped out at the top of the range.
Many, many traders (like myself) don't know how to identify a range and trade it correctly. Like most things, it's easy to see after it's over. So, we could safely say that nearly all noob traders do what I did, that's what we've been taught.
I'm thinking (or attempting to) while I'm typing. Comes back to "in a range, buy weakness and sell strength".
Probably there are several bounces before the breakout. Also, I would say from what I've seen, but without having done any real analysis, that most breakouts are false breakouts.
When it gets to the top of the range, the scalpers take their profit and sell, the wrong trend traders who were short get scared out and buy, or their stop gets hit and they buy. They got in too early as it headed down or even as it broke out; the scalpers and range traders bought.
Bottom line: gotta learn how and when to fade. Is this stop hunting? Not really. The stops were buys.Ignored
Dislikedyou guys need to think more about the micro-structure of the forex market.
Oh yeah I use an ECN.
Ignored
DislikedWho are you taking money from when trading?
Who is taking your money when you lose?
Why?
Understanding these questions would improve anyones trading.
OK OK
I will bow outIgnored
DislikedBoris posted this to ForexFactory awhile back (about six months or so I think) and it sparked quite a bit of discussion. The thread eventually got pretty argumentative and was closed by admins. I can't find it now, so who knows what happened to it. To make a long story interesting, I invested some time and coded this as an EA just to backtest (against multiple pairs) and it performed very poorly.
Many of us are convinced that stop hunting is a real market mechanic but I haven't yet figured out how to exploit it. I'm still working on it though.Ignored
DislikedThese are good questions. When the market takes a big move in minutes, I assume it's a bank, hedge fund, etc. Unless it's news, then everyone's into the act doing their own thing to take advantage.
When the market is moving slowly I assume only other traders and speculators are in the mix.Ignored