Hi coscorp, thanks for the very informative posts. Need to get my head round them though!
R.e your TP levels, my attitude is that the same rules apply to avoiding stop hunting by brokers. For example, there was a triple top formation on gbp/usd today-now where are the stops going to be-just above the triple top perhaps? ANd look what happens-price runs up-bang, takes them out. But this triple top is also near an 00 level so what then? Bang, takes out the 00 level as well as it's another popular area. And oh look, it's managed to drop to as low as 33 (at the time of writing) -so the shorts were right, but the timing and placing of the SL was way too obvious.
In relation to that, I think the same applies to TP levels. 00 AND 50 are extremely popular levels, so if I want to exit a long at a profit, I would put my TP below the 50 level-especially as that's the selling price. The brokers don't want you to get your profits in the same way that they want to run your stops, so they will try to make sure those levels aren't hit. Of course you can say that it works both ways but looking at eurusd chart I think it would be quite obvious that many people are long, and as a result, a lot of TP orders would be around that 50 level.
But then again I get the feeling you might know more than me and that I might just be paranoid
Which of course doesn't mean that they're not out to get you.
Hmm rereading my SL/TP theory, it does actually sound totally bonkers as I was long cable this morning. I give up.
R.e your TP levels, my attitude is that the same rules apply to avoiding stop hunting by brokers. For example, there was a triple top formation on gbp/usd today-now where are the stops going to be-just above the triple top perhaps? ANd look what happens-price runs up-bang, takes them out. But this triple top is also near an 00 level so what then? Bang, takes out the 00 level as well as it's another popular area. And oh look, it's managed to drop to as low as 33 (at the time of writing) -so the shorts were right, but the timing and placing of the SL was way too obvious.
In relation to that, I think the same applies to TP levels. 00 AND 50 are extremely popular levels, so if I want to exit a long at a profit, I would put my TP below the 50 level-especially as that's the selling price. The brokers don't want you to get your profits in the same way that they want to run your stops, so they will try to make sure those levels aren't hit. Of course you can say that it works both ways but looking at eurusd chart I think it would be quite obvious that many people are long, and as a result, a lot of TP orders would be around that 50 level.
But then again I get the feeling you might know more than me and that I might just be paranoid
Which of course doesn't mean that they're not out to get you.
Hmm rereading my SL/TP theory, it does actually sound totally bonkers as I was long cable this morning. I give up.