Stop Hunting occurence? | Forex Factory

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Stop Hunting occurence?

  • #1
  • First Post: Aug 2, 2010 9:11am Aug 2, 2010 9:11am
This is a trade done of FXCM demo, look at how the Stops get triggered. The actual bid-ask are no where near. The spread at this moment to the Stop is more than 5pips. I wonder how can they justify such actions.

Edit: the red line shows the price of close of position. it is system generated.
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  • #2
  • Aug 2, 2010 10:20am Aug 2, 2010 10:20am
I think no one will hunt your stop in a demo account.
  • #3
  • Aug 2, 2010 10:29am Aug 2, 2010 10:29am
Quoting Darth Vader
I think no one will hunt your stop in a demo account.
LOL ... I understand that very well. But the reason I trade demo is to open a live later on. If they have such disruptions in demo, would or should I risk my real money with them??
  • #4
  • Aug 2, 2010 10:39am Aug 2, 2010 10:39am
Quoting falkor
LOL ... I understand that very well. But the reason I trade demo is to open a live later on. If they have such disruptions in demo, would or should I risk my real money with them??
Brokers typically assign a higher priority toward maintaining their live platforms. It's not unusual to see "buggy" demos. And they certainly wouldn't bother hunting demo stops.
  • #5
  • Aug 2, 2010 11:39am Aug 2, 2010 11:39am
Quoting billflet
And they certainly wouldn't bother hunting demo stops.
I'm not casting judgement on whether stop-hunting is occurring in the particular situation the OP is talking about, but In general I don't consider it to be something that is instigated at the retail/market maker level. But, It is entirely possible that his stops were taken out indirectly by dealers taking out stops on the interbank, and seen as his demo feed will be derived from interbank prices, he would also taken out as a consequence. Retail brokers don't need to pull dirty tricks... I'm guessing a lot of stops (retail and institutional) are all placed at similar levels.
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  • #6
  • Aug 2, 2010 12:34pm Aug 2, 2010 12:34pm
Quoting billflet
Brokers typically assign a higher priority toward maintaining their live platforms. It's not unusual to see "buggy" demos. And they certainly wouldn't bother hunting demo stops.
Frankly, I dont care if they care to hunt stops or not. If they can hunt my stops, its me to blame NOT them.

What however I entirely disagree is that the price DOES NOT reach the specified objective and yet the Stop Order gets executed. Consider this: If I place a stop at 20/50/100 pips, and broker just wants to take out the stop, in this case he can just do it, even if the prices are much much below stop.

If the price meets the stop and the order gets executed, its fine! Not otherwise.
  • #7
  • Aug 2, 2010 4:56pm Aug 2, 2010 4:56pm
Quoting Leonlorenzo
I'm not casting judgement on whether stop-hunting is occurring in the particular situation the OP is talking about, but In general I don't consider it to be something that is instigated at the retail/market maker level. But, It is entirely possible that his stops were taken out indirectly by dealers taking out stops on the interbank, and seen as his demo feed will be derived from interbank prices, he would also taken out as a consequence. Retail brokers don't need to pull dirty tricks... I'm guessing a lot of stops (retail and institutional) are...
I agree. Stops tend to be clustered and people/institutions who trade at massive volume can push prices into these levels to their advantage.

Falkor's complaint is that price never reached his stop price, but the stop was taken out anyway, making the issue a broker specific problem rather than normal market wide movement caused by big volume players intentionally moving price around.

My reply was more in response to Falkor saying that he's measuring the quality of service on demo to decide whether or not to open a live account. I just want to point out that demo servers do not always function as well as live servers (and vice versa). Usually a broker isn't as quick to chase down a bug on the demo server as they are on a live server--they prioritize. I've always been a firm believer in opening a small live account rather than a demo--especially if the broker offers micro accounts. Then you can better judge the live platform without risking much. With FXCM you can open an account for 25 bucks and get a much better idea of how good or bad live orders are filled. I've used quite few different brokers but don't have any experience with FXCM. But if I wanted to know, I'd open a tiny account, make a few trades, and make a small withdrawal. Then you get the real answers about funding, withdrawals, and trade execution.
  • #8
  • Aug 3, 2010 12:01am Aug 3, 2010 12:01am
Quoting billflet
I agree....

Thanks. Point taken.

It is possible that demo and real a/c have different feeds OR probably not!

Ps: I hope you get my drift. I dont want to blame anyone, but want to highlight this as an instance where we are at mercy of brokers - who themselves are not accountable to anybody, least of all to retail traders.
  • #9
  • Aug 3, 2010 12:36am Aug 3, 2010 12:36am
Quoting falkor
Thanks. Point taken.

It is possible that demo and real a/c have different feeds OR probably not!

Ps: I hope you get my drift. I dont want to blame anyone, but want to highlight this as an instance where we are at mercy of brokers - who themselves are not accountable to anybody, least of all to retail traders.
While demo platforms are meant to mimic live they are not always as accurate. I am not a broker or a platform wiz so I cannot explain why this occurs but you will see it happen regardless of who you are with.

I traded for sometime on the GFT demo platform before going live with them. The difference wasnt huge but there were not as many spikes in data as you see on the demos. Spreads are also much better on most platforms going live as opposed to demos.

Stop hunting is usually used as an excuse for poor trading. If you can prove that it has happened then contact your provider with the info. I am yet to have a dispute that hasnt been resolved and if there was a case then I would remove my cash and head elsewhere.

RT
  • #10
  • Aug 3, 2010 1:29am Aug 3, 2010 1:29am
Quoting Razor_trader
there were not as many spikes in data as you see on the demos.

RT
Hello RT,

Do you mean the real accounts are much more 'smooth' than the demo accounts? Did I get this right?


Thanks,
  • #11
  • Aug 3, 2010 1:39am Aug 3, 2010 1:39am
Quoting falkor
Hello RT,

Do you mean the real accounts are much more 'smooth' than the demo accounts? Did I get this right?


Thanks,
In my experience yes. The data feeds for live are always more accurate compared to demos.

With GTF I could pull up a side by side snap shot of the same period of time and have a few "anomalies" like spikes that are out of range for the demo and not apparent on the live. One example was on the GBP/USD which had a spike candle that was some 1200 pips long, however it was only evident on the hourly chart and below. On anything higher it just wasnt there. On the live chart it was all normal and even after refreshing and clearing the storage file for the demo the spike still appeared.

Now in reference to trading. If I had a trade on at the time the chances are I would have been stopped out, and I may not have known why without looking through the timeframes. I am not saying this would be the case with yours but demo platforms are there to help new traders come to terms with trading charts. As for there reliability well that is open for discussion.

With all the micro options avail today opening a live account and having a more reliable (I am not saying perfect feed because even live feeds can have problems) platform is usually a better way to go. You will at times find yourself trading more sensibly and keeping to your plan whilst getting better quotes and better fills.

RT
  • #12
  • Aug 3, 2010 2:04am Aug 3, 2010 2:04am
It is possible there are significant divergences in real and demo feeds. However, there are lots of questions. It still does not explain how one feed (real) can be used to execute an order which should use the other (demo) feed.

I have trading demo for many months now, I haven't experienced or observed things like this. [Not talking of slippages grrr] So, it is only fair to give the first benefit of doubt to the broker. On the repeated instance, it is better to pack the bags and leave.
  • #13
  • Aug 3, 2010 2:24am Aug 3, 2010 2:24am
Remember what broker where talking about you and i know what can happen with this broker they been doing this for years.
  • #14
  • Aug 3, 2010 6:51am Aug 3, 2010 6:51am
I've had this with fxcm. You just have to reduce your position size, and not have too tight stops.
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  • #15
  • Aug 3, 2010 8:18am Aug 3, 2010 8:18am
Quoting Forexsetups
I've had this with fxcm. You just have to reduce your position size, and not have too tight stops.
If this is the case then I would be looking for a new broker. There should be no reason that you cannot trade with comfort with a large broker. I know the game gets different when your trading in excess of 50 standard contracts (5,000,000) and if this was the case then I would hope you had found all the perks you could with a broker but to have to alter your game plan because of issues that FXCM may have, well lets just say I would be out and looking at there competion to see who is prepare to offer me a better deal, beside FXCM spreads are pretty ordinary compared to what is available with many other.

RT
  • #16
  • Aug 14, 2010 9:45pm Aug 14, 2010 9:45pm
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Maybe your stop gotten taken out due to temporary lapse in liquidity. If all the limit orders were pulled between the last price traded and your stop-loss, even for a millisecond, the spread will widen to the next best offer. This used to happen with currenex, apparently. Not sure if the same sort of thing could happen in a bucketshop.
  • #17
  • Last Post: Aug 20, 2010 11:26pm Aug 20, 2010 11:26pm
Are you for real? Thats a tick chart and its a 6 pip move. That happens all the time, its called a "big order hitting the market".
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