Aren't the banks interested in hunting our stops? | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Broker that has fixed buy-stops/sell-stops, min/no slippage? 5 replies

Fixed stops loss or atr stops ? 0 replies

Mental stops vs hard stops 1 reply

hunting stops 3 replies

I am looking for EA to put Buy Stops, Buy limits, Sell limits, and Sell Stops. I will 0 replies

Aren't the banks interested in hunting our stops?

  • Poll

  • Can we use market sentiment of small users as a filter?
  •  
  •  
  •  
  •  
  •  
  • #1
  • First Post: Apr 9, 2011 5:11am Apr 9, 2011 5:11am
As in this industry there is no value added, just transferred from one to another, so aren't the big players always searching the zones with huge stops? I exclude funds investing in equities and commodities and some others players, which simply has to change the currency.

Is this is right... then the trend is always from the zone of small orders, towards the zone of big orders, so more player to be caught.

Can't we use the information provided by different brokers, for the positions of middle and small investors and speculators? If there are more small players that are shorting, then it is more probable "the big boys" to be the counterpart of the positions, so the big money want the pair to go up up and away, so their profit to be larger.
Better to lose opportunity, rather than capital !
  • #2
  • Apr 9, 2011 7:24am Apr 9, 2011 7:24am
Quoting metrilbg
As in this industry there is no value added, just transferred from one to another, so aren't the big players always searching the zones with huge stops? I exclude funds investing in equities and commodities and some others players, which simply has to change the currency.

Is this is right... then the trend is always from the zone of small orders, towards the zone of big orders, so more player to be caught.

Can't we use the information provided by different brokers, for the positions of middle and small investors and speculators? If there are more...
you assume that reversing small investors' positions will become profitable. But in effect, they are entering at random as a whole. Random entries, reversed will still be random entries, thus not profitable.
I think you can't just conclude that the big boys take opposite positions to the small.
Also you don't know what the traders' time horizons is. 1 minute? 5 years? how will you know the different objectives?
  • #3
  • Apr 9, 2011 3:28pm Apr 9, 2011 3:28pm
Quoting Custos
you assume that reversing small investors' positions will become profitable. But in effect, they are entering at random as a whole. Random entries, reversed will still be random entries, thus not profitable.
I think you can't just conclude that the big boys take opposite positions to the small.
Also you don't know what the traders' time horizons is. 1 minute? 5 years? how will you know the different objectives?
I mean looking in something like this: http://fxtrade.oanda.com/analysis/open-position-ratios

If the positions were random, then the buys and sells must be equal all the time ... but here we see 69% short euro/dollar...

i think based on this, that the euro will still go higher in the next days and will breach the 1.3500 with at least 10-15 pips, so the stops to be triggered ...

The Canadian dollar will continue to appreciate against the USD until some of the longs are covered and the small investors take the long side ...

No bad feelings Custos, just some brainstorming ...

I would be glad, if others express their opinion too, Feel free to speak!
Better to lose opportunity, rather than capital !
  • #4
  • Apr 9, 2011 3:39pm Apr 9, 2011 3:39pm
Quoting metrilbg
so aren't the big players always searching the zones with huge stops?
Oh yes, that's pretty much all they're interested in. If there were no stops to hunt they'd be out of business in like a week. If you're not in front of your screen looking for the stops for at least 80 hours per week, don't expect to find them. If you consider blinking important for your eyes, you'll never find the stops. Big players don't blink, they just hunt the stops. When the big players leave for work in the mornings in their Ferraris, they go dressed in camo because they actually think of themselves as hunters. And yes, you can bet your bottom dollar they are coming for your stops. Watch your back, traders.
  • #5
  • Apr 9, 2011 5:15pm Apr 9, 2011 5:15pm
Quoting metrilbg
I mean looking in something like this: http://fxtrade.oanda.com/analysis/open-position-ratios

If the positions were random, then the buys and sells must be equal all the time ... but here we see 69% short euro/dollar...
My opinion here: in the long-term they should be equal. In the short-term they can be anything they want it to be. Random entries don't have to be 50% short & long at all times. As well, you have different time-frames all these small investors are looking at.
Quoting metrilbg
i think based on this, that the euro will still go higher in the next days and will breach the 1.3500 with at least 10-15 pips, so the stops to be triggered ...
think about it: based on small investors' positions???? really think about that. Not because of fundamental news that big guys are looking out for? Or anticipations of that? What does drive price?
Do "educated" big guys really care about what small "uneducated" guys think and how they position themselves? Really ask yourself that question.
I think it is more the other way around, the small uneducated guys want to know what the big guys do and emulate that.

Quoting metrilbg
The Canadian dollar will continue to appreciate against the USD until some of the longs are covered and the small investors take the long side ...
No, among other things it will rise until the unrest in the middle east is over. unrest means oil appreciation => cad appreciation.
Rising oil means slower growth for normal economies (US for example), cause among other things transportation will cost more.
  • #6
  • Apr 9, 2011 5:30pm Apr 9, 2011 5:30pm
Quoting metrilbg
I mean looking in something like this: http://fxtrade.oanda.com/analysis/open-position-ratios

If the positions were random, then the buys and sells must be equal all the time ... but here we see 69% short euro/dollar...

i think based on this, that the euro will still go higher in the next days and will breach the 1.3500 with at least 10-15 pips, so the stops to be triggered ...

The Canadian dollar will continue to appreciate against the USD until some of the longs are covered and the small investors take the long side ...

No bad feelings...
you also have to think a bit how big the positions of big guys are. Hedge funds with billions of dollars to invest. You think they really care about a couple of pips? They gotta bring in some serious return for their investors. I might be wrong here, but I don't think stop hunting is an intentional activity by the big guys.

In order for them to position themselves in the longterm according to fundamentals, they need to first let the market move against the position they wanna take. Let's say, they wanna go long in the market. Now to get large positions into the market they need a lot of sellers. How do you get buyers to become sellers? You create a spontaneous bear market by selling a large chunk. Then, when momentum picks up you buy everything back and buy even larger chunks. Now you got enough sellers who help you establish your position.

At least my interpretation how the "stop hunting" happens. It is not intentional, but a side-effect of them trying to establish positions.
  • #7
  • Apr 9, 2011 6:24pm Apr 9, 2011 6:24pm
I think your right costos, the big boys need to bring returns to thier costmers, so it is simply business. "Stophunting" i would say is another way of the big boys getting the price they want, not merely to take u out of a trade, but so they can buy at lower prices and sell at higher prices for a profit. Forex is simply a buy and sell business. No succesful business person will buy at a high price if they have the power to buy at low prices and sell at higher prices. Our job as small traders is to find out when prices are low enough to buy and high enough to sell.
  • #8
  • Apr 9, 2011 6:36pm Apr 9, 2011 6:36pm
Let's get real. Retail is 3-4% of total fx turnover. Have you ever heard of lions hunting mice?

But it does feel good to think that the world revolves around you, doesn't it? And it would also provide a good excuse for poor trading and being stopped out much too often.

Seems like ego-centric delusion more than anything else.
  • #9
  • Apr 9, 2011 6:48pm Apr 9, 2011 6:48pm
Quoting medici
Let's get real. Retail is 3-4% of total fx turnover. Have you ever heard of lions hunting mice?

But it does feel good to think that the world revolves around you, doesn't it? And it would also provide a good excuse for poor trading and being stopped out much too often.

Ego-centric delusion...
I think you should rethink this, Medici. Haven't you seen the black vans with tinted windows outside your house? They are the stop hunters. They always try peering into my windows when I'm not looking, trying to see my stops. It's hard on the family but I suppose it's just part of being a trader. Comes with the job I guess. Go look out your windows right now, black van, maybe even choppers, you'll see THEM. Report back any findings.
  • #10
  • Apr 9, 2011 6:50pm Apr 9, 2011 6:50pm
Quoting CindyXXXX
A big player could be providing liquidity the same place as a small retail trader... The retail trader is just a casualty of war, when the market was simply seeking the available liquidity at that whatever price it may be.

Of course no one gives a shit about my little retail position, but if I'm sitting at a place where they may be targeting, I indirectly become a target simply for having my stops at the same place as where the big ones are piled up.
Perhaps, but the question was whether the banks are hunting your stops, and the answer is no.
  • #11
  • Apr 9, 2011 6:54pm Apr 9, 2011 6:54pm
Quoting Scotty B
I think you should rethink this, Medici. Haven't you seen the black vans with tinted windows outside your house? They are the stop hunters. They always try peering into my windows when I'm not looking, trying to see my stops. It's hard on the family but I suppose it's just part of being a trader. Comes with the job I guess. Go look out your windows right now, black van, maybe even choppers, you'll see THEM. Report back any findings.
Could they be Islamic fundamentalists?
  • #12
  • Apr 9, 2011 7:02pm Apr 9, 2011 7:02pm
Quoting medici
Could they be Islamic fundamentalists?
  • #13
  • Apr 9, 2011 9:12pm Apr 9, 2011 9:12pm
Quoting metrilbg
I mean looking in something like this: http://fxtrade.oanda.com/analysis/open-position-ratios

If the positions were random, then the buys and sells must be equal all the time ... but here we see 69% short euro/dollar...
This is not quite true. It may mean that trades from trend-reversal strategies tend to stay open longer than ones from trend following strategies, but the net profitability on random data will be the same.
  • #14
  • Apr 9, 2011 9:14pm Apr 9, 2011 9:14pm
Quoting medici
Could they be Islamic fundamentalists?
Only if you are doing a haram (forbidden) interest-bearing strategy like carry trade.
  • #15
  • Apr 9, 2011 9:58pm Apr 9, 2011 9:58pm
Quoting metrilbg
I mean looking in something like this: http://fxtrade.oanda.com/analysis/open-position-ratios

If the positions were random, then the buys and sells must be equal all the time ... but here we see 69% short euro/dollar...
No matter what the market is doing the retail will always lose. There's an inherent tendency of an average retail speculator to hold on to losing positions and close winners early. So if the market is bullish retail will be short in general, if the market is bearish - retail will be long. You think it's the other way around - the market is bullish because the retail is short. No, the market will turn around when the retail is still short; of course, they will be tricked into the long side, but the majority will still be short. What you see on the chart or on oanda retail position screen is not the cause of future movement but the result of the past. I'm not saying that stop-hunting doesn't exist though.
  • #16
  • Apr 10, 2011 1:12am Apr 10, 2011 1:12am
Quoting medici
Let's get real. Retail is 3-4% of total fx turnover. Have you ever heard of lions hunting mice?

But it does feel good to think that the world revolves around you, doesn't it? And it would also provide a good excuse for poor trading and being stopped out much too often.

Seems like ego-centric delusion more than anything else.
my thoughts exactly
  • #17
  • Apr 10, 2011 8:56am Apr 10, 2011 8:56am
Quoting mbkennel
This is not quite true. It may mean that trades from trend-reversal strategies tend to stay open longer than ones from trend following strategies, but the net profitability on random data will be the same.
You are right about the retail traders indeed, they hold loosing trades and close profits early.

Quoting Custos
you also have to think a bit how big the positions of big guys are. Hedge funds with billions of dollars to invest. You think they really care about a couple of pips? They gotta bring in some serious return for their investors. I might be wrong here, but I don't think stop hunting is an intentional activity by the big guys.
The fundamentals are the real driver of the market, not technical reasons.
I mean using the average loosing traders - retailers and do the opposite, will it be wining in the long run ? if the retailers are short EU, then open only long based on technical reasons, it should be as a filter, not as a main reason to enter.

For the equality between shorts and longs you are right Custos, i'm glad that you have taken some time off to right it.

Thanks for the good thread all of You are doing!

In conclusion of the post, yes it is maybe a side effect this "stop hunting".
Better to lose opportunity, rather than capital !
  • #18
  • Apr 10, 2011 9:04am Apr 10, 2011 9:04am
I'm adding a poll to see, if somebody thinks, that it may be used a filter for the medium term positions they take and will it be rational to be added as an "indicator" to look at.

I think it is not needed for a scalping and short term trades, and will not be rational to look for.

Please feel free to give your vote!
Better to lose opportunity, rather than capital !
  • #19
  • Apr 10, 2011 9:21am Apr 10, 2011 9:21am
Quoting Scotty B
Watch your back, traders.




C'mon people - trade your plan!

If it sucks you'll be taken to the cleaners by your shitty trading approach/methodology.

If your trading is flawless and you still lose - then you can blame your broker.
  • #20
  • Apr 10, 2011 10:29am Apr 10, 2011 10:29am
IF retailers lose in long-term ( then winner is big-boy) so in long-term there will only big-boys and then only several biggest-boys in market
Is I am right?
So why this didn't happen even trading is century old now?
0 traders viewing now