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Confused about stop hunting

  • #21
  • Jan 9, 2011 8:21pm Jan 9, 2011 8:21pm
Thanks to all the replies, it's getting a bit clearer

From the respones I was wondering:

1. Is it correct to assume that stop hunting (not by retail brokers) are done mainly or exclusively outside of the London and U.S. trading sessions as these may tend to be more illiquidity, and thus better odds of succeeding? Or is this practice seen anytime?

2. Is there a way to see them on the charts - historically? For example do they look more like spikes that blip on a 1 or 5 minute chart?

3. How does one get into the mindset of those doing the hunting? This seems like it could be a difficult proposition as those capable of doing it may all be motivated by differing reasons - and therefore differing executions. But any suggestions appreciated.

Thanks again.
Joe
  • #22
  • Jan 9, 2011 9:32pm Jan 9, 2011 9:32pm
Quoting vicky_ag
Intervention happens when the banks see their currency appreciating/depreciating too fast. And it happens against the general market view. The market is saying the currency has gained/lost clout, it doesn't care if it has reach a low/high...price discovery keeps on happening. So even with all the intervention people hold on to their belief. Plus it provides a way to mint money off the bank's back.

Well stop hunting definition is finding a long whip on one broker while others show no whip at all. While that is a loose definition it's the only way you can "prove" that it's likely a stop hunt.

The intervention comment I made was to show you that even a central bank rarely gets their way for long, unless it is a concerted effort by multiple central banks to prop or weaken a certain currency.

BOJ commented that they intervened last year... and since then the Yen currency is weaker by what? 3 cents off near historic lows vs the USD. If a central bank can't move the market consistantly you can forget about a measely trader doing it.

As a matter of fact Warren Buffet traded the FX market for a stint a few years back and lost billions by betting against the USD. So forget the notion of thinking you can move the market. This is completely outside the notion of stop hunting tho. Your broker controls the price you get on your platform. Until the market becomes centrally cleared this is the way it is.
  • #23
  • Jan 9, 2011 9:38pm Jan 9, 2011 9:38pm
99% of the time, claims of stop hunting are made by traders who have no idea what they are doing. I have had the price action move to within a few pips, or even one pip from triggering a stop loss, only to reverse and make a profit.

It's more about putting a stop loss in the right place rather than having it hunted.
  • #24
  • Jan 9, 2011 10:53pm Jan 9, 2011 10:53pm
Quoting joekurr
Thanks to all the replies, it's getting a bit clearer

From the respones I was wondering:

1. Is it correct to assume that stop hunting (not by retail brokers) are done mainly or exclusively outside of the London and U.S. trading sessions as these may tend to be more illiquidity, and thus better odds of succeeding?...
1. Stop hunting can occur at any point in the day. I have seen stop hunts occur during London U.S. session, as well as during late NY sessions, as well as Sydney session, Tokyo session.

The London session and London/NY overlap is the most liquid obviously so if they are hunting stops it requires a larger order, but usually hits a larger size of stops, but also potential for hitting larger standing limit orders as well.

Just because stops are tripped doesn't mean that someone hunted them. They could of been tripped for a large number of reasons unrelated to people hunting them.

I have seen stop runs/cascades of 5-10 pips and 30 pips or more during London/NY session, but also seen same stop getting tripped of 5-10 pips and 30 pips or more during illiquid sessions too. It just depends what is going on in the market. It depends how the market is positioned, what their emotions are, what their sensitivities are, what their expectations are, what the order flow book looks like, what the liquidity situation looks like, what mood the hunters are in, what the other market participants are doing, etc.

There are stop hunts that occur both during liquid and illiquid sessions that are both high probability. I could also show you examples of both that are low probability for any number of reasons. It just depends what is going on in the market.

Trading isn't some rigid game with strict rules, its more of a fluid thing. Human beings have emotions that can change sometimes quickly, sometimes slowly, sometimes in an average time. It just depends what is going on.

Heck I have even seen stops getting tripped when a bank executed a much larger order than they wanted to by mistake. By the time they figured out their mistake, the damage had already been done to the order flow book/liquidity structure.
Private message me for a link to my order flow website.
  • #25
  • Edited 1:46am Jan 10, 2011 12:11am | Edited 1:46am
Quoting pip_seeker
Well stop hunting definition is finding a long whip on one broker while others show no whip at all. While that is a loose definition it's the only way you can "prove" that it's likely a stop hunt.

The intervention comment I made was to show you that even a central bank rarely gets their way for long, unless it is a concerted effort by multiple central banks to prop or weaken a certain currency.

BOJ commented that they intervened last year... and since then the Yen currency is weaker by what? 3 cents off near historic lows vs the USD. If a...
Central banks are not in the market to make money, rather to slow down the pace of their currencies depreciation/appreciation. Therein lies the rub. They are constantly betting against the market but not in it for the profit. So at all times Central banks < markets.

BOJ intervention dint have a profit motive and hence not the desired example to be compared with.

BTW where did some one talk about measly/retail trader moving the market? That can never be done.
  • #26
  • Jan 10, 2011 6:30am Jan 10, 2011 6:30am
Quoting vicky_ag
Central banks are not in the market to make money, rather to slow down the pace of their currencies depreciation/appreciation. Therein lies the rub. They are constantly betting against the market but not in it for the profit. So at all times Central banks < markets.

BOJ intervention dint have a profit motive and hence not the desired example to be compared with.

BTW where did some one talk about measly/retail trader moving the market? That can never be done.
Does it really matter that central bank intervention isn't about making money? If we are talking about stop hunting you are looking for reasons why you got stop hunted or if indeed it was a stop hunt how do you tell the difference?

I think too many people want to blame their mistake on something and so a stop hunt is an easy way out.

The point is your broker controls the price you get, if the whip that stops you out is only on your platform and on none of the others what does that tell you. A market wide stop hunt? forget it, you could never prove such a thing.
  • #27
  • Jan 10, 2011 10:38am Jan 10, 2011 10:38am
Quoting pip_seeker
Does it really matter that central bank intervention isn't about making money? If we are talking about stop hunting you are looking for reasons why you got stop hunted or if indeed it was a stop hunt how do you tell the difference?

I think too many people want to blame their mistake on something and so a stop hunt is an easy way out.

The point is your broker controls the price you get, if the whip that stops you out is only on your platform and on none of the others what does that tell you. A market wide stop hunt? forget it, you could never...
Buddy, I think you are at the deep end. Things being discussed in this thread seems to be beyond you. Let it be. Thats all I have to say.
  • #28
  • Jan 10, 2011 3:34pm Jan 10, 2011 3:34pm
Quoting vicky_ag
Buddy, I think you are at the deep end. Things being discussed in this thread seems to be beyond you. Let it be. Thats all I have to say.

why because you can't think of a rebuttal? Why call it a stop hunt if that's not what it is?

That is my only point.

PS: I love the deep end.
  • #29
  • Jan 10, 2011 3:52pm Jan 10, 2011 3:52pm
I think he is trying to get across that:

-the manipulation of a price feed displayed by your broker to trigger stops (stop-hunting to the normal individual)

-and the regular practice of taking advantage of the guaranteed direction in which stop orders (which become market orders) influence price discovery, as is done by informed participants and participants of suitable size

are two completely different things. One is an inevitable consequence of microstructure, while the other can be rectified by doing your due diligence on the broker you opt to trade with.
  • #30
  • Aug 20, 2011 1:01pm Aug 20, 2011 1:01pm
Quoting Marv
Just curious, why has it been removed?

its removed cuz hes selling his book on the subject for $145. leaving the thread on would be a conflict of interest for his book.
  • #31
  • Edited 6:29pm Aug 20, 2011 4:15pm | Edited 6:29pm
Quoting nicklam66
its removed cuz hes selling his book on the subject for $145. leaving the thread on would be a conflict of interest for his book.
Right. As if that old thread would "expose" everything the book is talking about. If anything, it would be a little ad for the book.

He did post the thread back on his website and mentioned why he took it off FF in the first place, which answers my question and has nothing to do with your uninformed guess.

Just as with any book on trading, no body is forcing you to buy it.
  • #32
  • Aug 20, 2011 4:32pm Aug 20, 2011 4:32pm
i totally don't see the reason why y'all is all up nicklam's butt. he stated facts. nothing more or less.

seems people see more into things than what is written...

oh wait, i know why. it's because fact and truth is forbidden on this forum, and only bullshit is allowed. even innocuous facts are an affront to the sensibilities of the locals.
Congratulations ScalaFX for coming out of the closet!
  • #33
  • Aug 20, 2011 5:16pm Aug 20, 2011 5:16pm
I've recently been coming to some idea about stop hunting. I might be wrong and more experienced people can correct me but anyway, here's the thing. Even if there was no hunting the price would still move in a similar way. And the reason is that market is constantly searching for liquidity and it's finding it! Whether it is done "consciously" by hunters or "unconsciously" by the market itself.
  • #34
  • Aug 20, 2011 6:27pm Aug 20, 2011 6:27pm
Quoting nubcake
i totally don't see the reason why y'all is all up nicklam's butt. he stated facts. nothing more or less.
Damn, if only I cared what you think.
  • #35
  • Aug 20, 2011 7:56pm Aug 20, 2011 7:56pm
eurotrash : yeah. it's not a stretch though to see 'selling a book' could relate to 'removing a thread with potentially valuable thoughts'. although you are right that the thread was removed not due to the book, but due to not wanting to reveal his edge to the universe.

the assumption that ds removed the thread because it's a conflict of interest with his pending book may not be correct, but it's a very reasonable assumption (even though it's wrong) and not in any way flaming. i know i wouldn't want leave stuff out there for free if i was about to release a saleable product based on any part of it.

so the way i see it that he got it half right, and none of it sounded inflammatory to me whether he was right or wrong.

marv : i like turtles. feel free to put me on ignore... or would you rather show the world how awesome you are with your cute pointless statements?
Congratulations ScalaFX for coming out of the closet!
  • #36
  • Aug 20, 2011 11:15pm Aug 20, 2011 11:15pm
Quoting nubcake
eurotrash : yeah. it's not a stretch though to see 'selling a book' could relate to 'removing a thread with potentially valuable thoughts'. although you are right that the thread was removed not due to the book, but due to not wanting to reveal his edge to the universe.

the assumption that ds removed the thread because it's a conflict of interest with his pending book may not be correct, but it's a very reasonable assumption (even though it's wrong) and not in any way flaming. i know i wouldn't want leave stuff out there for free if i was about...
Blah blah blah. You're not even an OF trader. Your "opinion" on DS and his book is of no value. - Hence my comment.

No need to put you on ignore as it's easy to not read your posts.
  • #37
  • Aug 20, 2011 11:20pm Aug 20, 2011 11:20pm
yahuh. totally. i really like the part where you talk about my opinion of DS and / or his book... since i made no such opinion on either.

i like how you keep finding a reason to reply though. even if it is all garbage and incorrect
Congratulations ScalaFX for coming out of the closet!
  • #38
  • Aug 21, 2011 5:01am Aug 21, 2011 5:01am
Quoting nubcake
incorrect

But here you like correctness somehow... hmmm that's a tad bit IRONIC.
  • #39
  • Aug 22, 2011 1:53am Aug 22, 2011 1:53am
Quoting Darkstar
In reality anyone with a 6 figure account can move price .
May I be so bold;
With all due respect and in my humble opinion I find that statement to be TOTALLY RIDICULOUS.

How did you arrive at that conclusion? Have you never read how much it takes for a Central Bank to intervene? Do you have an inkling of what a 3 to 4 trillion dollar per day market means? Or are you just talking about 1/100th of a nano pip?

You're the "oh great learned one" so please clarify your remark. Or are you just interested in marketing?

Thank you.
  • #40
  • Aug 22, 2011 3:34am Aug 22, 2011 3:34am
Quoting egadsforex
May I be so bold;
With all due respect and in my humble opinion I find that statement to be TOTALLY RIDICULOUS.

How did you arrive at that conclusion? Have you never read how much it takes for a Central Bank to intervene? Do you have an inkling of what a 3 to 4 trillion dollar per day market means? Or are you just talking about 1/100th of a nano pip?

You're the "oh great learned one" so please clarify your remark. Or are you just interested in marketing?

Thank you.
Since I have no idea whether he will be reading this or not, let me attempt to reply.

 

  1. The spot market is about $1.5 trillion a day (BIS 2010).
  2. A large percentage of that volume is "hot potato trading" by dealers (Lyons). Therefore a given transaction tends to result in a lot more "volume" than its nominal size.
  3. The remaining volume must be divided by all currencies over the whole day. Therefore not quite as massive as you're probably thinking.
  4. There are times during the 24 hour day when liquidity is lower than average and higher than average.


Can you move price with a 6 figure account? Well of course you *can*, all you need is for the liquidity to be low enough in order for your position size to consume the liquidity. How likely is it? In my opinion, generally unlikely. It depends what sort of leverage you use (will your position size be 7 or 8 figures?), and if liquidity happens to be particularly low (right before news, during the twilight hours, etc). How far will you move it? Well certainly not as far as when central banks do intervention; however, there's no reason for "move" to mean something on such a scale. Probably very little (again, depends on leverage and liquidity); however, bear in mind that if you move it even a few pips, you could trigger other orders which in turn could move price further, triggering more etc. Granted "you" are not the one moving it all the way. Also bear in mind that the algos providing you with the liquidity are not going to stand around filling a large order at the given price.

If I may be so bold, it appears your understanding of the finer details of the market is lacking. I tend to agree with your basic objection, but it's obvious you have an axe to grind so I'm calling you out.

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