Can someone answer question about Brokers chasing stops?

First, I hope this is the right place to post this. If not, please forgive.

To make this as short, I'll just dive right in.
I saw on another thread where someone noted a Broker who was honest and that they don't chase your stops. I think it was Collective Brokers, or something like that. Sounds good, but this is why I ask the question.

My question is, why would it matter if your broker is honest or not? Even if you find an honest broker who won't chase your stops, more than likely, hundreds more have placed trades with the dishonest brokers and have placed their stops around the same place yours is with your honest broker. So you would be taken out anyway because of the dishonest broker chasing someone elses stop.

I mean price goes where it goes, whether your Broker is honest or not. The ones chasing stops has to move the price to take them out. If your stop with your honest broker is in the same area of the guys stop with the dishonest broker then you get stopped out too. No matter if your broker is honest or not. As long as their are dishonest stop chasers out their, then everyone is subject to get taken out, honest broker or not. Am I right?

That's it. Hope it's not a dumb question. If so, please pardon a post from a nooby trader.

Thanks for any insight.

I think you're confusing legitimate stop-hunting in the market with dealing desk brokers pushing prices to trigger stop orders even though the real market may never have gotten to such a price level.

Putting stops in obvious places is asking to get taken by the market makers & movers, has nothing to do with honest or dishonest brokers.

What you are talking about, I believe, is for example having an open buy order with a stop at 1.2000. Potentially with a dishonest deal desk broker, orders make it to and past 1.2000 and triggered your stop-loss even though in reality the market really never made it past 1.2002.

I really not sure I guess. But I thought when they talk about brokers chasing stops, they mean forcing the market in the direction of your stop loss so as to trip it and take you out of the market at a loss.


Is this what you're referring to?
Here's something that happened to me one time. I'm too new at this to know if this is normal but I thought it was pretty strange. I was using NinjaTrader with Zenfire data feed. I was trading the Euro future contract using the SuperDome. I went long one contract with a 2.5 point stop loss (10 ticks).

Using the SuperDome, in the price colume, the "last sale" price is highlighted in yellow, while the actual bid price is highlighted in blue, the ask price in green.
Usualy the bid and ask price hover within a tick above and below the last sale price. But this time I noticed something very strange. As soon as I placed my trade with the 10 tick stop loss, the blue highlighted numbers (bid price) started falling very quickly towards my stop loss while the yellow last sale price stayed still. The last sale price didn't move a single tick down but the blue bid price raced down, took out my stop, then climbed right back up to the yellow last sale price 10 ticks above. Well, if the yellow signifies the last sale price, then why didn't it move down to where my stop was taken out since that would've been the current "last sale". Instead, the bid price climbed back up to the previouse last sale which never budged a tick.

Usually the last sale price follows the bid/ask which is what I was referring to about chasing stops.

The first chart is the result of an automated trade placed with Gain. How in the WORLD would I get an order filled at a price the market never even came close to? Strange. However, when I disconnected my data feed and then later reconnected it (so that the "strange" market prices were historical), a back-test of the SAME data didn't show the same spurious result. Evidence of very BLATANT price manipulation. I have a similar example of the same place trying to take out my stop. .

Another reason to take things like this with a grain of salt. Paschall, it appears you were trading around 08:30. If that were Eastern Time then that is around a major news time in the US and the spreads can easily widen the measily 5 or 6 pips you were slipped. It isnt necessarily manipulation but more... running an EA near a major news time (and not knowing better).

@Brusher- most br0kers dont manipulate the open market, they manipulate the feed that YOU see. They dont move the market. I know in mt4 br0kers have this plugin for their end. http://www.forexfactory.com/showthread.php?t=70582 and I am sure ninjatrader br0kers can do similar tricks.

Or perhaps you guys are just arent placing your stops in the best of places. Well in Paschalls case we know that since he is using an autotrader (a bad one at that) and likely doesnt know why it is buying or selling.

Just an idea but since I dont use ninjatrader maybe someone else has a better answer for you

Unfortunately, you're wrong on every point you just tried to make.

1.I am not in Eastern time
2. That level doesn't is not a stop level (you see, a "stop" is to protect an "open" position. We call it "open" because you have to "close it" later. If you will look more closely, grasshopper, you will see this was on an order FILL. That's what we call it when you Buy to open a LONG position. Keep at it you'll get it eventually).
3. There are several more examples of "stop-searching" that are many times larger.
4. Making a judgment of the long-term performance of a system based on a 6 minute window? Wow. Really? I'm sure you've purchased many seemingly better systems for yourself. Keep buying systems, my friend. You'll get there one day.

1. You may notice that I said IF denoting that IF this were 8:30 am Eastern Time, news releases could be a possibility.

2. Ohhh so when you opened the first buy order at 1.4952'4 and then sold it at 1.4950'8, you meant for that to happen? So explain the next one for me, sell at 1.4947'9 and you bought (or covered your sell position) at 1.4949'2. Sooo you got filled ( I looked this up; Fill- The action of completing or satisfying an order for a security or commodity) as you say, and then covered for a loss? Or in other words you stopped the trade for a loss. hmm Well Investopedia had this to say about covering a position: The act of completing a transaction in order to remove any obligations. And this is what they had to say about a stoploss order: A stop-loss order is designed to limit an investor's loss on a security position. Seem to me we are saying the same thing, you just did it the bassackwards way. But then again, there is much this grasshopper needs to learn.

3. And yet you didnt show them. Maybe there was a spike in your demo feed. That happens often since most br0kers are less concerned with the demo feed as they are with the live feed.

4. It was actually a 16 minute window where there were quite a few losses in there (not counting your slippage; oh, sorry, let me explain slippage for you. The difference between the expected price of a trade, and the price the trade actually executes at. Slippage often occurs during periods of higher volatility, when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade.) Sorry fella, I dont need to buy someone elses crappy system, I have my own for that. http://cdn.forexfactory.com/images/s...im/winking.gif

Now, if you REALLY want to believe that your measly broker is going out and manipulating a 1.5 to 3 trillion dollar a day market, you go right ahead and think that. And who knows... maybe Santa will bring you a shiny toy truck to play with this holiday too!

Junior member paschall does no appear to understand bid/ask-pricing and its graphical representation on the chart. Furthermore, said junior member does not appear to understand ninjatraders fill-mechnism during backtests and its implicit limitations.