Stop losses being spiked | Forex Factory

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Stop losses being spiked

  • #1
  • First Post: Mar 1, 2010 6:19pm Mar 1, 2010 6:19pm
As a rookie trading live I have a question. I've tried to be very careful and follow a few golden rules about stoploses. However, since going live I've been spiked out a half dozen times. I never thought anything about it and put it down to my rookie mistakes.

However, I've just been informed that "some" brokers will try and spike you out of your stoploss. Is this true?
  • #2
  • Mar 2, 2010 2:02am Mar 2, 2010 2:02am
This is simple. Download a few different MT4s, all from different brokers. Then look at the times you were spiked out. If they exist on these charts as well as your broker's, then you're guilty of having a stop poorly placed.

If you see that the price never was hit on the charts but your broker's charts show it, then you might have a problem.

Also, when it happens come here and ask for a price. Just be very specific about the time and people will respond. There are lots of people using lots of feeds here, so you'll know if your broker is playing with you.

Once you've done this, come back here and tell us what you found, even if it is your fault, because this might just be a lesson you need to learn.
  • #3
  • Mar 2, 2010 3:57am Mar 2, 2010 3:57am
Forex is traded OTC. There is not a centralize interbank market that set a definitive price at any moment of time. Each brokers can have its own price.
If he spikes by 1 or 2 pips it will be almost impossible for any trader to detect. My second broker did some spikes of 100 pips and that was obvious.

The only way small spikes can be detected is by using statistics over thousands of trades and accounts. I don't have the possibility to do it and it is over the capacity of individual traders.

The NFA (National Futures Association) gives the following advices:
- broker should have a good reputation
- creditworthiness of the broker (if the broker bankrupt, you may lose your money)
- is the broker regulated. An US broker should be regulated by NFA and CFTC. Some other countries have regulative organization for Forex, others don't.

Not all regulative organization are equal, give better assurance than others.
For instance the BaFin (Germany) check only the creditworthiness of the company. While it is very important it will not check they are giving you a fair price.
  • #4
  • Mar 2, 2010 4:30am Mar 2, 2010 4:30am
sure, beware of such brokers
  • #5
  • Mar 4, 2010 6:25pm Mar 4, 2010 6:25pm
I've checked my previous stoploses with data from another MT4 broker and it looks like out of the 5 I was complaining about, four might have been my problem and one that's "unexplained".

It's just something I'll have to be careful about.
  • #6
  • Mar 5, 2010 3:14pm Mar 5, 2010 3:14pm
Jake, what you have learned is what we all start out with. Dunno if it's blatant disinformation or it's just unfortunate but it's BS.

Markets take out clusters of SL to get the most money for the dealers... smart money taking out the scared money.

Here's a tip from a good trader friend of mine, set your SL 20/30 pips away from where you should. If price goes there, look to get out a few pips better of. Discipline is required yes, but you'll also be risking the same amount of $ anyway (lot size adjusted).
  • #7
  • Mar 5, 2010 9:46pm Mar 5, 2010 9:46pm
Quoting Jake Snake
As a rookie trading live I have a question. I've tried to be very careful and follow a few golden rules about stoploses. However, since going live I've been spiked out a half dozen times. I never thought anything about it and put it down to my rookie mistakes.

However, I've just been informed that "some" brokers will try and spike you out of your stoploss. Is this true?
Check other brokers MT4 and compare, see the difference of price, if you got spiked like 10 pips they probably didn't spike you since each broker has their own network to access the market so they have different prices. However the difference is minimal, if you got spiked like 50 pips etc, call your broker and ask sometimes its a issue on their side and they may reimburse you.

I don't think Brokers are allowed to "spike" you that sounds quite illegal, they would be scamming their own clients. Although there are many Forex Brokers and some may not be well regulated or shady being based in eastern Europe or other sketchy places. Stick to the larger reputable Companies I use Oanda. Heck if you have a large account, trade with your local bank they have higher commissions but good sense of mind if you got like 50k etc.
  • #8
  • Mar 6, 2010 1:09am Mar 6, 2010 1:09am
Zeroh bro he addressed that in the post above mine
  • #9
  • Mar 6, 2010 12:21pm Mar 6, 2010 12:21pm
MWahahahahaha.

Seriously, your problem is in putting your stops where you "should" put them. Put them in places they "shouldn't" be and they wont get hit half as often.
  • #10
  • Mar 6, 2010 1:07pm Mar 6, 2010 1:07pm
Quoting Darkstar
MWahahahahaha.

Seriously, your problem is in putting your stops where you "should" put them. Put them in places they "shouldn't" be and they wont get hit half as often.
Darkstar, can you maybe give us an example of where stops "shouldn't" be?
  • #11
  • Mar 6, 2010 1:33pm Mar 6, 2010 1:33pm
Where every technical analyst says they should be I'm assuming.

I have pretty much every darkstar post in my memory lol, but this comes to mind:

"Buch of bad info in this thread. Let me break it down for you.

Brokers don't hunt "your" stops. Contrary to popular belief, your just not that important. What they hunt are "concentrations" of stops.

Say you have a nice clean up trendline. Technical trader lore says that if that trendline gets pierced, the trend is reversing so you should put your stop just the other side of it. Well guess what. Everyone has their stops in the same place. Stop hunters look for opportunities like this.

Being a broker with deep pockets (actually it's VERY rarely a broker that hunts your stops but whatever) I can move prices around by buying and selling a huge volume. What I'll do is start shorting like a madman, driving price lower. If my pockets are deep enough (or the market is thin enough) I can push the price through the trendline and trigger your stops. Knowing where your stops are I can set my TP at your SL level so in effect your selling me your position which I'm using to cover my shorts. Make sense?

And as an FYI, most retail brokers DO hedge. No, their usually not hedging every order you place in the market, but they are hedging their net exposure. Just because most people lose doesn't mean that the net positions don't pose a massive risk."

My emphasis added..
  • #12
  • Mar 6, 2010 1:50pm Mar 6, 2010 1:50pm
Couldnt have said it better myself.
  • #13
  • Mar 6, 2010 3:16pm Mar 6, 2010 3:16pm
What do you mean by spiked out? i tried looking it up to no avail. sorry.
  • #14
  • Mar 6, 2010 4:36pm Mar 6, 2010 4:36pm
Quoting Deusomega

Say you have a nice clean up trendline. Technical trader lore says that if that trendline gets pierced, the trend is reversing so you should put your stop just the other side of it. Well guess what. Everyone has their stops in the same place. Stop hunters look for opportunities like this.
  • #15
  • Mar 7, 2010 5:56am Mar 7, 2010 5:56am
Why don't you tell us which broker you are talking about. Maybe someone else already had the same problem or someone might have never noticed.
  • #16
  • Mar 7, 2010 7:11am Mar 7, 2010 7:11am
little example FXPRO // OANDA find the difference lol:
Attached Image(s) (click to enlarge)
Click to Enlarge Name: fxpronzdusd.jpg Size: 104 KB
Click to Enlarge Name: oandanzdusd.jpg Size: 153 KB
  • #17
  • Mar 7, 2010 7:15am Mar 7, 2010 7:15am
Quoting Jake Snake
As a rookie trading live I have a question. I've tried to be very careful and follow a few golden rules about stoploses. However, since going live I've been spiked out a half dozen times. I never thought anything about it and put it down to my rookie mistakes.

However, I've just been informed that "some" brokers will try and spike you out of your stoploss. Is this true?
As a semi-experienced trader, my take profits are being spiked.
Are they yours ?
If so, thanks a lot


Quoting mistersimple
little example FXPRO // OANDA find the difference lol:
You did realize that you're comparing a 30 sec chart to a 1 min one ?
Right ?
Right ?
  • #18
  • Mar 7, 2010 7:31am Mar 7, 2010 7:31am
Thanks for the observations guys and everything has been taken in. I probably wont get caught out again .... hopefully
  • #19
  • Nov 26, 2020 1:32am Nov 26, 2020 1:32am
Every new trader should use stop loss in their trading. It will help them to control their losses.
  • #20
  • Last Post: Nov 26, 2020 2:04am Nov 26, 2020 2:04am
Stop loss is very useful for every trader. But to use it, you need proper knowledge about the stop loss.
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