Hello Everybody,
I’ve seen alot of discussion about stop hunting in the forums.
Are these people primarily short term traders with tight stops?
Is stop hunting a real threat for a swing trader setting 50 pip SL?
If anyone has experienced this, I would like to know and with which broker.
Thanks,
Jeff
Stop hunting by forex brokers can affect anybody, at
whatever pip stop level.
It is not specific to one trader though. Traders tend to be
quite obvious about where they place thier stops ie at
certain levels like support & resistance levels, therefore
the brokers who hunt stops generally take out a lot
of stops at one time.
The moral of the story is to place stops a few pips below
S/R lines therefore negating this ploy.
Stop hunting is more a forex bucket shop broker problem in the currencies as daydreamer pointed out…
In other markets like the S&P and Russell the floor traders at the CBOT and CME there will purposely shove the markets through certain levels to knock traders out of their positions and then let the market continue onwards in its original direction.
Think about it… if your method is to place your stop outside the swing low of the last move, do you really think no one else can figure out where all of these orders are sitting in a market? They know, i know, your broker knows, and certain bucket shop brokers have been known to exploit that information.
I’ve been watching the 1 hr demo charts on the GBP/USD with Northfinance, Oanda and FX Street.
I did see some differences during news mostly. Up to 35 pips i think it was.
Nothing written in stone here;
I was thinking if I was to set a 50 pip SL i would be alright. Looking back a year there were only a couple of spikes that high. I was thinking 50 pips would be far enough outside the SR levels that a stop spike would be painfully obvious.
Granted these are demo charts, but am I to expect that much of a difference with a live account?
BTW I have been thinking of going with either Oanda or MBTrading. MB is ECN correct? So theoretically it should be better with them in this regard.
MB is an ECN. I use EFX Group which is an introductory broker for MB Trading and they use the same platform, execution, etc. and i’ve been very happy with everything. There is an EFX review group in the rate your brokers section.
Demo and live charts should be the same, the quoted prices for entry and exits however will be different.
Hey Daedalus,
I’ve got questions about EFX platform.
I entered a trade and while I was trying to mess with column widths in the open orders window, I accidentally cancelled the order.
What happens to the margin debit on a cancelled order?
I re-entered and now the margin debit is showing the original trade plus the second one, are they both open or will that first one eventually get credited back?
Also, is it possible to resize the columns in the open order window? It’s unusable with them all crowded together.
Is it possible to edit or modify an order without exiting?
I’d appreciate any info you can offer.
Thanks
Jeff
Guess that’s what demo trading is all about. Crash without the cash.
I’m not sure on the margin debit, but if its showing both, i guess both are open. You can modify without exiting, try right clicking on the order in the position or orders window and you can change order.
As for resizing columns, you can do it but its a bit buggy, try just manually resizing the entire window and seeing if that can’t make it more viewable.
You should also know that EFX is about to roll out their new web trading platform, so if you don’t like the desktop application they have another one on the way.
Right on, Thanks
Hey again Daedalus,
I have a couple of more questions if you don’t mind.
I tried asking this at MBT trading desk chat and no answer.
Why do positions seem to stay open after they’ve been cancelled or hit a stop?
I can’t seem to find an order type that allows me to place a SL behind a postion and then move it once it’s opened. I don’t want to use trailing stops either.
Thanks for the help,
Jeff
I don’t know why a position would say open - unless your stops are off or something or you’re stops were to buy in a long position, or short out of a short position, i.e. not kicking you out but actually adding to the trade.
You should be able to place a stop easily and move it. Just put a typical stop market order at its given level and then right click on it in the order book and go change order.
That should do it.
Heres the help doc for navigator…
Ok,
I was getting Open Orders confused with Open Positions. This platform is going to take some learning.
Why does the order disappear right away? Once you click buy, the order is created, then when the position is created, the order disappears and can’t be modified.
I’ve been using the help menu but it’s fairly light on info.
Do I understand this correctly, Stop Market - example: if I go long at 1.0050 (current price) and I set Stop Price at 1.0000 then it will close out at 1.0000?
The demo doesn’t seem to be doing that.
There are two settings, one is exit if touched, the other is trade through, so if price came down to, 1.0000, but not to 1.9990 then it might not exit your position.
The platform does take some getting used to… The order dissapears because its already been entered, and thus can’t be modified… your stop loss order should remain.
Ok, Thanks
Just stumbled onto this article and video on stop hunting…
You should check it out…
Profiting with Forex (PFX) - Watch Forex Professionals Currency Trade
Thanks,
That perspective makes alot more sense than the ‘they’re out to get me’ line of thinking.
Just stumbled onto this article and video on stop hunting…
You should check it out…
Profiting with Forex (PFX) - Watch Forex Professionals Currency Trade
Great article.
Found this piece very informative, take note of the highlighted portion.
The best way to manage your risk during news events is to understand what may happen with a tight stop or use an options hedge. Become informed and account for all the risks you are exposed to as a forex trader.
This does not only apply to stop hunting, “Become informed” about
all aspects of the forex markets & forex trading as a whole.
That perspective makes alot more sense than the ‘they’re out to get me’ line of thinking.
I have read & been involved in many discussions concerning this
subject. It is generally the uninformed, lazy, loser trader who
adhers to this idea, ‘they’re out to get me’
The need to blame somebody else rather than to admit that they
themselves are at fault pervades their thinking.
A bit off topic, but does EFX or any other ECN broker insure your funds in case of bankruptcy?
No, not that I’m aware of. IMHO, forget the whole ECN vs Retail DD vs MM issue and pick a broker with a solid (long) and ethical track record. Trust me, this will be a pretty short list.
Also, don’t fall prey to the “Bigger is Better” false dichotomy… just Google “Refco”