Stop Loss vs. Hidden Stop Loss | Forex Factory

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Stop Loss vs. Hidden Stop Loss

  • #1
  • First Post: Jul 16, 2012 8:41am Jul 16, 2012 8:41am
Hello fellows for around the globe !

From the prospective of these ECN brokers, MB Trading and Dukascopy what are the possibilities to hunt stop to the grade that will justify to use hidden stop loss.
I would love to read your comments as it will help me to decide about the matter.
  • #2
  • Jul 16, 2012 9:43am Jul 16, 2012 9:43am
They don't have money to hunt your Stop-Loss. Those who hunt your stops are those who you are trading against with.

Use Hard Stop Loss because you'll be reluctant to close your positions when using mental Stop Loss.
  • #3
  • Jul 16, 2012 10:19am Jul 16, 2012 10:19am
If your computer is running use an EA to "Hide" your stop. I use one I wrote. I enter a price and the computer closes a trade (limit or stop) just the same as if the broker did it. However, if your computer is not running or if a power outage occurs I hard stop is better than nothing.

Broker's DO hunt stops don't let anyone tell you otherwise. But it also depends on where you stop is relative to current price. If your stop is a round number that is only 20 pips away...guess what...you're stopped out.

However if you keep your stop outside the broker's range (how you wish to calculate that is up to you), it is less likely that you will be stopped out. I use 25 pips either side of the current day's high or low most brokers will have to use a lot of money to hunt your stop there...unless price is already there.

If you use MT4, your broker has a back end mechanism to spike the price or even change the candle to get your stop. I've personally seen the screen.

Stopping out is part of the game and if used correctly is a safety mechanism...but don't announce it to your broker, he'll/she'll find a way to tag it and take your money.
  • #4
  • Jul 16, 2012 10:59am Jul 16, 2012 10:59am
Quoting gspajon
If you use MT4, your broker has a back end mechanism to spike the price or even change the candle to get your stop. I've personally seen the screen.
I am really concern about your statment, do you think NFA will let such a robbery in broad daylight ?
  • #5
  • Jul 16, 2012 11:04am Jul 16, 2012 11:04am
Quoting duyk20
They don't have money to hunt your Stop-Loss. Those who hunt your stops are those who you are trading against with.

Use Hard Stop Loss because you'll be reluctant to close your positions when using mental Stop Loss.
That's make a lot of sense. I never have been thinking from this approach.
  • #6
  • Jul 16, 2012 11:42am Jul 16, 2012 11:42am
Quoting N_na_nah
I am really concern about your statment, do you think NFA will let such a robbery in broad daylight ?
its not in "broad daylight" as you put it. It is within the confines of the near term market movements. Example: You enter long EUR/USD at 1.2210. You place your stop at 1.2290. (20 pips). Price moves up slightly to 1.2215 then falls to 1.2195. How much of a stretch is it for the broker to see your (and many other's stops) and say, "...whoops my liquidity fell off and I had to widen my spread slightly..." or "...my liquidity provider quoted a small 5 pip spike but only for a second..."

What is the NFA going to do about that? How will they be made aware of it? Are you going to whine to the NFA (or your broker for that matter) over your mini lot trade that stopped out at 20 pips? They won't even give you the time of day...but don't doubt it...it does happen. So say it doesn't or its too much money is just putting your head in the sand...

Plan for their crap and use it against them.
  • #7
  • Jul 16, 2012 11:58am Jul 16, 2012 11:58am
Quoting gspajon
If your computer is running use an EA to "Hide" your stop. I use one I wrote. I enter a price and the computer closes a trade (limit or stop) just the same as if the broker did it. However, if your computer is not running or if a power outage occurs I hard stop is better than nothing.

Broker's DO hunt stops don't let anyone tell you otherwise. But it also depends on where you stop is relative to current price. If your stop is a round number that is only 20 pips away...guess what...you're stopped out.

However if you keep your stop...
stop giving misleading info mt4 server has a filter pa option which can change pa and its usually not changed this is why some brokers pa looks different than others. If mt4 had a spike feature im sure it woukd be shutdown in 2 days. Use ur head a little.
  • #8
  • Jul 16, 2012 12:04pm Jul 16, 2012 12:04pm
Quoting N_na_nah
Hello fellows for around the globe !

From the prospective of these ECN brokers, MB Trading and Dukascopy what are the possibilities to hunt stop to the grade that will justify to use hidden stop loss.
I would love to read your comments as it will help me to decide about the matter.
ur stops matter this is why metals and oil have bigger moves om short tf. they are riskier plays. A close sl may get hunted if its near s&r. If your broker breaks those levels whike others dont then u can make a case there. But you would prob need to show proof of this say 5 times to make any cAse. If your dealing bigger tf then ur sl maynot need to be hidden because of money management.
  • #9
  • Jul 17, 2012 1:35am Jul 17, 2012 1:35am
Quoting sidhujag
stop giving misleading info mt4 server has a filter pa option which can change pa and its usually not changed this is why some brokers pa looks different than others. If mt4 had a spike feature im sure it woukd be shutdown in 2 days. Use ur head a little.
Believe what you wish to believe...brokers don't stop hunt...the forex market cannot be manipulated...Santa Claus is alive and well...the Easter Bunny lays eggs...and we are all looking for our "pot-o-gold" at the end of the broker's rainbow.
  • #10
  • Jul 17, 2012 1:57am Jul 17, 2012 1:57am
That some participants in the market hunt for stops is undoubtedly true but that's only because most stops tend to be grouped in similar areas and so make an easy target. You can minimise this by putting your stop somewhere else.

You should always hard stop in the market to ensure discipline and sound risk control. Having a stop hunted down now and again is irritating but nothing compared to being blown away by having no stop and the market racing away against you.
  • #11
  • Jul 17, 2012 9:23am Jul 17, 2012 9:23am
Quoting gspajon
If you use MT4, your broker has a back end mechanism to spike the price or even change the candle to get your stop. I've personally seen the screen.
What I mean by "broad light" is that if the broker change the candle you can take a screen shut of that and then compare it with other brokers, if you see that the candle in question is "unique" to this broker then you have a case for NFA and even to file a law suit.
  • #12
  • Jul 17, 2012 9:26am Jul 17, 2012 9:26am
Quoting marcmarc
That some participants in the market hunt for stops is undoubtedly true but that's only because most stops tend to be grouped in similar areas and so make an easy target. You can minimise this by putting your stop somewhere else.

You should always hard stop in the market to ensure discipline and sound risk control. Having a stop hunted down now and again is irritating but nothing compared to being blown away by having no stop and the market racing away against you.
Thanks. Your post makes a lot of sense.
  • #13
  • Jul 17, 2012 11:56pm Jul 17, 2012 11:56pm
Quoting N_na_nah
What I mean by "broad light" is that if the broker change the candle you can take a screen shut of that and then compare it with other brokers, if you see that the candle in question is "unique" to this broker then you have a case for NFA and even to file a law suit.
Again it sounds like you chose not to believe what I say...and that's fine but your screen shot of a candle that is different with other brokers means NOTHING. I've seen a difference of as much as 20 pips from one broker to the next and the answer I've heard is..."that's what our liquidity provider has quoted us..." and then they pull out their quotes and prove it. Those quotes go right through the back screen I mentioned before and no one can prove otherwise.

You don't have to believe me its OK. Believe what you want...but why don't you investigate it for yourself if you really want to know. Don't ask here everyone here still believes in Santa Claus and their dealer's Pot-o-Gold.
  • #14
  • Jul 18, 2012 6:55am Jul 18, 2012 6:55am
ROFL don't forget the Earth is flat, smoking is good for your health and hey, I just saw Elvis alive!!

Quoting gspajon
Santa Claus is alive and well...the Easter Bunny lays eggs...
forget about tomorrow, just steal away into the night
  • #15
  • Jul 18, 2012 7:18am Jul 18, 2012 7:18am
In my opinion I feel that Stop Hunting does not exist like it used to. As long as a Trader is spending a good time in analysis looking at ATR and other volatility indicators, and simply placing their stop outside of these ranges, they should be ok.

I've personally seen traders who enter at exactly the wrong moment in the trend and range, and then blame the Broker when they are stopped out. Truth of the matter is the "spike" was due to the price level reaching a major S/R level.

Just my 2 cents..

~FOREX SWING KING
  • #16
  • Jul 18, 2012 7:19am Jul 18, 2012 7:19am
Quoting gspajon
Believe what you wish to believe...brokers don't stop hunt...the forex market cannot be manipulated...Santa Claus is alive and well...the Easter Bunny lays eggs...and we are all looking for our "pot-o-gold" at the end of the broker's rainbow.
You should Google "MT4 virtual dealer plugin" and you will see that you are wrong.

There's also a thread on FF talking about this : http://www.forexfactory.com/showthread.php?t=70582
MT4/MT5 EAs/Indicators/Alerts coder
  • #17
  • Jul 18, 2012 7:23am Jul 18, 2012 7:23am
Whether you hide your stops or not, won't change the fact that a million other people will have stops sitting in the same place as you do or "mentally" do... These prices will inevitably become a target for those annoying people who are much bigger than you and who seek liquidity in order to fill their own large trades/ orders.

Don't take it personally, it's just business, as they say.
Time hides Nothing
  • #18
  • Jul 18, 2012 7:57am Jul 18, 2012 7:57am
Brokers aren't interested in your stop loss
tradewith60
  • #19
  • Jul 18, 2012 9:37am Jul 18, 2012 9:37am
Quoting 60minuteman

Brokers aren't interested in your stop loss
They're interested in all orders if they provide liquidity, they quote according to their book, their liquidity providers quotes, and the underlying market. They quote what they want, to who they want, and fill what they want. It's all in the small print somewhere and all perfectly legal.

If people are paranoid about their marketmaker purposely knocking out their stops then there's an easy solution, trade futures.
  • #20
  • Jul 18, 2012 10:34am Jul 18, 2012 10:34am
Quoting pipmutt
They're interested in all orders if they provide liquidity, they quote according to their book, their liquidity providers quotes, and the underlying market. They quote what they want, to who they want, and fill what they want. It's all in the small print somewhere and all perfectly legal.

If people are paranoid about their marketmaker purposely knocking out their stops then there's an easy solution, trade futures.
sorry, brokers aren't interested in my stops... at least not recently
tradewith60
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