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Do you believe brokers hunt your stoploss

  • #21
  • May 3, 2017 2:27am May 3, 2017 2:27am
Quoting marcmarc
As Mingary said, a stop loss is just an order in the market waiting to be filled. Getting a stop loss hit on a spike is one unfortunate cost of using stop losses; it can be minimised by placing the stop slightly beyond the 'obvious' place that many other traders might choose so their stops get filled, not yours. More importantly, I think, is the question whether stop losses are necessary. I would say if you don't use hard stops on each and every trade then you are gambling, not trading. Without a stop you have no risk control and you cannot properly...
This is excellent. Not using stop loss is nothing but gambling and not trading.
  • #22
  • May 3, 2017 3:27am May 3, 2017 3:27am
its hard for a trader to cut a losing trade theirs all ways hope that it will turn its in the mind games
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  • #23
  • May 3, 2017 3:28am May 3, 2017 3:28am
Age old question, the answer of course is YES! and no. Your broker doesn't necessarily care about your stops, but the market as a whole does, stops are a source of liquidity. If there is a cluster of stop orders, say at 100 in a bull market. Price is currently at 101 and the market made a swing low at 100. Lots of little guys are getting long and because they are little, they are leveraged to the gills.

The players who are sizeable enough to move the market, whose orders do just that--MOVE THE MARKET--have to think about, and be smart about where and how they will get liquidity. Can you guys imagine having that problem? When you place an order, does price tick up 3 pips because of you? Learning about these issues and thinking through them changed my entire outlook on trading. A few years back it was all about "orderflow" for me. Following that road eventually opened my eyes. The funny thing is, when we trade forex, we really don't TRADE. We are stuck, in most cases, with market orders through our brokers. Sure, sure, we are "trading" but we're such little fish, and trading in insulated and contrived markets, that we never learn the real nuts and bolts of trading.

So, mechanically, how do the big players take advantage of your stops down at 99.89? Why does price jump down and bounce off 99.75 and then continue upwards? What is actually happening?
  • #24
  • May 3, 2017 3:57am May 3, 2017 3:57am
Quoting Aussi
its hard for a trader to cut a losing trade theirs all ways hope that it will turn its in the mind games

I think you're getting to the real core of the issue now: not wanting to use stops is just one manifestation of loss avoidance - we all will generally do everything we can to avoid a loss, to avoid being 'wrong'. I think we're just hardwired that way and society/education generally reinforces that, after all, in most regular jobs you end up getting fired for being wrong too often.

Unfortunately, in trading, such a loss avoidance mindset is a big problem. Trying to avoid a loss means letting a loser run and then you are on the path to the big bad loser wiping your account.

Always using stop losses is just a discipline to fix this problem. Yeah, it hurts to have your stop picked off on a spike and then see the market rush away to what would have been a big profit. Equally, though, how many times has the trade been stopped out for a modest, manageable, loss and the market keeps going that way, further and further that would wipe you out? The stop has saved you to fight another day. You simply have to accept the rough with the smooth for your own safety and trading longevity.

Absolutely, it is all in the mind, and a lot of the mindgames is dealing with losses, dealing with being 'wrong'.
  • #25
  • May 3, 2017 10:21pm May 3, 2017 10:21pm
Quoting marcmarc
As Mingary said, a stop loss is just an order in the market waiting to be filled. Getting a stop loss hit on a spike is one unfortunate cost of using stop losses; it can be minimised by placing the stop slightly beyond the 'obvious' place that many other traders might choose so their stops get filled, not yours. More importantly, I think, is the question whether stop losses are necessary. I would say if you don't use hard stops on each and every trade then you are gambling, not trading. Without a stop you have no risk control and you cannot properly...
I have a large account ....... don't need a stoploss.......reason I have a large account is because I don't use a stoploss
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  • #26
  • May 4, 2017 1:39am May 4, 2017 1:39am
Quoting Aussi
{quote} I have a large account ....... don't need a stoploss.......reason I have a large account is because I don't use a stoploss

Hi Aussi,

I'm genuinely pleased for you. I notice from your profile that you're a price action professional trader; I can't claim to be a professional trader but I have been trading my own modest account as my sole income source for the past 8 years, also on a pure price action style and I just can't conceive not using stops. I make lots of bad trades and it's only the stop loss that keeps my account safe. I know that stops degrade performance by knocking you out of trades that recover, but I accept that as a cost to avoid the big bad account damaging loss when a trade carries on being wrong.

As a professional, I'd like to take the opportunity to pick your brains if I may. If you do not use stop losses, how do you deal with trades that go into loss? You can't know in advance whether they will rebound or carry on the wrong way, nor for how far they might go. What do you do to avoid a huge damaging loss if you don't use stops?
  • #27
  • May 4, 2017 5:53am May 4, 2017 5:53am
Quoting marcmarc
{quote} Hi Aussi, I'm genuinely pleased for you. I notice from your profile that you're a price action professional trader; I can't claim to be a professional trader but I have been trading my own modest account as my sole income source for the past 8 years, also on a pure price action style and I just can't conceive not using stops. I make lots of bad trades and it's only the stop loss that keeps my account safe. I know that stops degrade performance by knocking you out of trades that recover, but I accept that as a cost to avoid the big bad account...
I agree with you , you need to trade how you see fit if it works for you .... use it

I am constantly in my home office watching the screen when trading , I love the gaps on Mondays and use them to my advantage , if you can find the colour stochastic and put lines at the 85 , 50 , 15 you can see the past action I use the 1 hour chart for my trading I also use the flo2 on my chart gives you an idea where its going , I see most people are working people and cant be on the computer like I am I pick my trades and use the two indicators to confirm them at times they do go against me but I am confident they will get into profit , the saying is >>>> trend is your friend 1hr day and mth charts for trend , price action on those charts is the key , go look at the price action on the aud/usd on those time frames notice I have not told people not to use stoploss but said I do not use them because I make money by not using them , kindest regards from dave
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  • #28
  • May 4, 2017 6:44am May 4, 2017 6:44am
If you can place big enough order to slightly move price action, you can count on cumulated stop losses to do the rest. It's not exactly stop hunting, but you have to know that every SL on buy order is effectively sell order and vice versa, so if you can take out stop losses around obvious support/resistance levels, you get a breakthrough. Are bucket shops doing it? No, if you trade with real STP, ECN providers and not dealing desk manipulator pretending to be STP. Are largest investment banks in currency business (Citi, JP, UBS, DB, BOA, Barc, GS, HSBS, XTX, MS...)doing it? You bet they do. They see "picture" of order flows of big piece of the market share. Why not take advantage of that? They are the true market makers.
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  • #29
  • Edited 8:04am May 4, 2017 7:51am | Edited 8:04am
If you have big order to fill for your client, you have to create a range, to get filled, because liquidity at particular price level becomes a problem. If you try to buy/sell all at once, price will probably skyrocket/skydive before you can fill your order. So you create multiple bounces from certain price level by placing partial buy/sell positions when price reaches desired level. When you are nearly filled, you can buy last partial order just a little below range, to get sellers on the south side of the range activated and then take out their SL with your buy order, which usually fires price action higher, preferably above range resistance, now taking out sellers SL at the north side of the range, pushing price even higher. It has nothing to do with intentional SL hunting, it's just big orders filling technique.

That's way it's prudent as a small retail trader to wait for closed candle breakout, before placing sell/buy order. You can still get caught in false breakout, but chances for that are way lower, especially if candle close is on higher time frame (4H, or even D).
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  • #30
  • Edited 10:47am May 4, 2017 10:05am | Edited 10:47am
Quoting Aussi
{quote} I agree with you , you need to trade how you see fit if it works for you .... use it I am constantly in my home office watching the screen when trading , I love the gaps on Mondays........
Hi Aussi,
Many thanks for sharing your market & trading insights. It would appear we trade very differently which would explain our different approaches to stops. I don't use any indicators at all and really am just looking to take whatever I can out of the current trend on a short timescale, entering after a retrace runs out of steam and by necessity using a hard & tight stop as my winners are very rarely home runs - more of a first base dash! Statistically, it's not the optimal way of trading but I find it suits & works for me so, like you say, I go with what I know I can do.
Very best of luck in your trading
  • #31
  • May 5, 2017 12:30am May 5, 2017 12:30am
I usually fight this with setting big SL and use trailing stop. I don't want big profits and therefore the trailing stop after some small profit is OK for me.
I agree with Aussi, large accounts should also help with this.
  • #32
  • May 5, 2017 5:17pm May 5, 2017 5:17pm
Quoting marcmarc
{quote} Hi Aussi, Many thanks for sharing your market & trading insights. It would appear we trade very differently which would explain our different approaches to stops. I don't use any indicators at all and really am just looking to take whatever I can out of the current trend on a short timescale, entering after a retrace runs out of steam and by necessity using a hard & tight stop as my winners are very rarely home runs - more of a first base dash! Statistically, it's not the optimal way of trading but I find it suits & works for me so, like...
I have tried lower time frames with good success , and to keep me honed in I do 5min charts on aud/usa for a hour from 5pm to 6pm do about 7 trades giving me about 15 to 25 dollars a trade then I stop , in my house when I do it my office door is closed I have complete concentration with no interruptions on which way the candle is going when a new candle starts

good luck with the small time frame mate , it takes practice and more practice I keep a record of each buy or sell for the hr so I can look back when I need to , you will see a pattern
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  • #33
  • May 5, 2017 6:44pm May 5, 2017 6:44pm
Hi all,if your that worried why don't you just use a hidden stop loss and take profits tool?. That way, if they still get taken out at least you'll know a bit better that your broker couldn't see them,so it might indicate more that your following the rest of the sheep to the slaughter and placing them where everybody else is!. The smart money know's anyway, they don't need to see your stop losses etc because they already know what your gonna do before you do!
  • #34
  • May 6, 2017 7:14pm May 6, 2017 7:14pm
Quoting marcmarc
As Mingary said, a stop loss is just an order in the market waiting to be filled. Getting a stop loss hit on a spike is one unfortunate cost of using stop losses; it can be minimised by placing the stop slightly beyond the 'obvious' place that many other traders might choose so their stops get filled, not yours. More importantly, I think, is the question whether stop losses are necessary. I would say if you don't use hard stops on each and every trade then you are gambling, not trading. Without a stop you have no risk control and you cannot properly...
gambling on forex is the same has trading in my books stops have nothing to do with it
people leave, but this thread will go on for ever
  • #35
  • May 7, 2017 12:08pm May 7, 2017 12:08pm
"My" rule of thumb, when placing stop loss under support or over resistance, is measuring previous spike and add spreads to it plus a few pips of buffer space. This is not my idea. I was thought this technic by bank's trading instructor and trader named Andrei Knight. It doesn't always prevent me from being taken out, just to see price reverse into "my" direction afterwards, but it works more often then not.
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  • #36
  • May 7, 2017 12:29pm May 7, 2017 12:29pm
Quoting Aussi
Hi girls and guys does your broker hunt your stoploss and do you believe a stoploss is a must
Markets have a tendency to go after stops but thats not because someone like your broker is actively conspiring against you. Markets are fueled by liquidity and stop losses provide liquidity. I keep mental stop loss levels and I exit if the market gets there and tends to stay there. If you are not going to be near your computer for a long time, then I say you keep your stops where they are away from high concentration of other stop loss orders.
Its all in the mind.
  • #37
  • May 7, 2017 5:00pm May 7, 2017 5:00pm
So an entity that makes money from commissions of your TRADES wants you to go broke? Ah ok

Your legit broker wants you doing well. Bigger account sizes = bigger commisions for them. Why the hell are they taking otherside? If youre getting taken out its because you have no idea what you are doing. So stop trading. Simples. Dont blame the game blame your education (or lack of)
  • #38
  • May 8, 2017 2:54am May 8, 2017 2:54am
Quoting Tom81
"My" rule of thumb, when placing stop loss under support or over resistance, is measuring previous spike and add spreads to it plus a few pips of buffer space. This is not my idea. I was thought this technic by bank's trading instructor and trader named Andrei Knight. It doesn't always prevent me from being taken out, just to see price reverse into "my" direction afterwards, but it works more often then not. {image}

Hi Tom81,
I agree completely, that's pretty much exactly what I do in setting stops. If there is going to be a stop-hunting spike then this is a good technique to avoid being caught a lot of the time yet not having the stop a ridiculously long way away. Of course, if the trend/flow is against you then you've got the trade wrong, you are going to be taken out and you should be grateful you are because the odds then favour things getting a lot worse for you if you stick around in the trade.
  • #39
  • Edited 3:35am May 8, 2017 3:19am | Edited 3:35am
Quoting Aussi
{quote} gambling on forex is the same has trading in my books stops have nothing to do with it
Hi Aussi,
I presume you mean forex trading is the same as gambling on forex to you. If you do, this is an interesting avenue to go down! It can be argued that trading is gambling, it certainly shares some common elements, but I don't consider I am gambling when I am trading. I think (it may be self-delusional, of course!) I am speculating. All of which requires, I think, some definitions, so:
- gambling to me is accepting fixed odds which are against you, e.g. playing roulette, buying a lottery ticket
- speculating to me is accepting unknown outcomes but with known limited risk when the assessed odds are in your favour.
The essential difference is that the former has negative statistical expectancy, the latter has a positive one.

So, for example, if I trade with the perceived current trend AND using a stop beyond the last retracement AND assess that the likely profit if correct is at least as large as the loss I am risking AND I am risking a sufficiently small % of my account on the trade, then I consider this to be a postive expectancy speculation. It may or may not work out this time, but over the long haul, if I keep repeating the speculation, I fully expect to make money in the aggregate.

If I do not hold to all the conditions then I am more likely gambling as I am either taking likely odds against me or I am not effectively controlling risk. Sorry to be repetitive but it means having a hard stop is an absolute must for me though I do understand why you do it differently.
  • #40
  • May 8, 2017 4:21am May 8, 2017 4:21am
Quoting Tom81
is measuring previous spike and add spreads to it plus a few pips of buffer space. {image}
Interesting!
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