Oanda: Stop Loss Hunting? Are they safe to put my money?

[rhodytrader]

but Actually now-a-days many exchanges are completely electronic, there are no "pits" and no "pit traders" who huddle together and do all the naughty things you talk about. Actually I trade cuurency futures on the (NSE) a regulated exchange, and suprisingly I've been far more profitable than i have been on the otc market employing the same trading technique on the same time frame.

Can you prove your performance is because of trading on the exchange? Or might it just be better market conditions for your trading technique? Or maybe it's you being more experienced and making better trades? I'm not suggesting one answer over any other, just suggesting that it might not be the exchange switch that explains the improved performance.

In an OTC market you have no way of knowing how much the broker fluctuates his price claiming it depends on his liquidity providers. How do you explain outrageous spreads and spikes not even during news events and two different accounts showing different prices for the same broker at the same time. Do you really beleive its all because of the liquidity providers?

You can compare your broker's prices against other brokers and data sources and know if they are out of line, so you definitely do have ways of checking things. The different prices in different accounts thing I could only possibly explain by the accounts being of different types under different conditions (guaranteed fills, fixed spreads, etc.). Even still, if I ever saw different prices quoted I would have a major problem with that broker. It's not something I've seen myself, though.

As far as the argument about brokers not hunting stops and tradign against you sorry I don't buy it.

Buy what? I'm sure it happens. There will always be those who attempt to manipulate things to their advantage. I just contend that it's MUCH less of an issue than folks would have you believe.

I used to think like you but then someone posted some webinar links on tradingmarkets.com here at BP. One of the webinars was presented by John Carter a well know trader with decades of experience. There he talks about the reality of brokers trading against you. I'm still not very sure like I said earlier but I'm more inclined to believe him than you (no offense)

Without having see the Carter stuff I cannot comment (though I also have "decades of experience"). Keep in mind, though, that things like the NFA rules on minimum capitalization and the steady increase in forex regulation taking place is squeezing out those bucket shops who were the big culprits of shady practices.

As I've said many times on this site, though, if you want to avoid any possible issues of this nature use an ECN broker rather than a dealer.

[Skalpist]

I really like Oanda's low spread but I'm deterred by the numerous stories posted here (Oanda Reviews | Forex Trading Broker) of people getting "stop loss" hunted. Is this true? Does Oanda trade against it's customers. Will they manipulate the prices just to get you stopped out so that they can make more money from you? Your advice is most appreciated. Thanks!

I've tested this theory on A LOT of brokers. I have yet to find a broker that really stop hunts. One way to test this for yourself is to run multiple copies of MetaTrader each with a different broker.

At 4Squared, at one time we were doing this for 18 different brokers at once and tested across all of them for 6 months. In all that time, there was not a single SHRED of evidence that any of the brokers did anything remotely like what they are repeatedly being accused of.

Oanda was one of the brokers we tested.

Thus far, in all of our testing, we have found a 100% correlation between traders simply making poor trading decisions and their claims of stop hunting.

In short, Oanda doesn't stop hunt, neither does IBFX, neither does FxOpen, or FXCM, or ...

In the case of Oanda, they have something north of 1 billion in deposits and several hundred million in active trades. Do you really think a company that is making that much money servicing trades is going to screw it up in such an easily verifiable method of stealing? Give me a break.

[Revone]

False.

You can get stop hunted in any market, with a market maker, or the big money handlers with an ECN broker, and so forth. Obviously market makers are much more sinister and their policies are not in line with your benefit. With an ECN broker you do get an honest play in the market, but the big money handlers will push you out if your not smart.

When your with a market maker, your not playing the real market, your playing their market, it's not a REAL market. You must understand this.

Stop hunting is not illegal. It's not a conspiracy, it's something that is well known and has been well known for a long time.

To combat this you need to be smart, you need to not place your stop loss based on the chart and a few support areas, you need to not place your stop loss where the majority of other traders just like you, are placing their stop loss. You need to focus more on your risk and reward ratio, your consistency and your accuracy. You need to find a proper broker and you need to understand that brokers policies. You need to understand where that broker makes the majority of their profit.

No broker specifically hunts you, they hunt the majority. You must understand that when you place a stop loss, your visible. You can be touched.

We can go on for days, but the above statement is absolutely false. Brokers do stop hunt, and IMO all market makers stop hunt at some point but it's not something that should stop you from trading. You need to incorporate a compensation in your trading plan to combat the possibility of your stops being hunted.

Oanda does stop hunt and has stop hunted. This is a fact.

It's not a big deal, it's just another side of trading that you need to compensate for. It's not a deal breaker.

Later.

[Revone]

And don't be fooled by low spreads with market makers, low spreads across the board should be a red flag and isn't necessarily a good thing, they compensate more in other ways and vice-verse.

[Skalpist]

Oanda does stop hunt and has stop hunted. This is a fact.

Saying something and then saying "this is a fact" does not make it so.

My company has tested this for more than 6 months. During that time there was ZERO evidence that any of the brokers we tested stop hunted ... and Oanda was one of them.

Brokers make their money NOT from trading themselves, but from trading ACTIVITY by their members. Stop hunting harms the ability of their members to continue trading activity. BROKERS do not stop hunt.

Major market players will (private equity firms, hedge funds, etc) but not brokers.

The plain and simple fact of the matter is that most brokers don't have enough capital to push a currency pair more than a pip or two. THAT is a fact ... and proveable (unlike the opinion you gave and then didn't provide ANY evidence to support it)

Take a look at how much money Oanda has (not trading account money on hand, but earnings) and it becomes obvious very quickly they don't have enough money to stop hunt.

If you claim that brokers stop hunt, please let us see any evidence that such a thing is even POSSIBLE given the small amount of money they have.

My evidence that they CAN'T can be found on their own web pages. Most retail brokers PUT TOGETHER don't have enough to effectively stop hunt (just do a little 2+2 math).

[Revone]

Market Makers stop hunt.

This is WIDELY KNOWN. FOR MANY MANY YEARS.

You think your six months of false research, probably didn't research correctly first of all, is worth anything?

Dude, stop hunting is a normal accepted tactic of market makers, it's a fact. Read your ****ing contracts.

Good day.

[Skalpist]

False.

Something I just thought of. A very simple EA can be written that will manage your "stops" for you. Instead of putting your stops into your order, let your EA manage it. This will make it "appear" as if you are trading without a stop.

I will bet you will find that your win/loss ratio will not change AT ALL.

That was one of the tests that we did to see if a broker was stop hunting. We would place orders for a month with stops, then for a month without them (letting an EA close an order at the location a stop would have been set).

This was just ONE of the tests we did across a six month time frame.

Again, trades without stops were no more likely to exit profitably than trades with them.

We tested trading with stops at predefined pip levels, stops at support/resistance levels, stops at some multiple above or below s/r levels, and so on ... and then again those same trades without stops and instead where those stops would be set having an EA exit the trade.

None of it mattered.

A trade that ended up being placed with the net order flow exited profitably. Those that ended up not being placed with the net order flow did not.

And again, a few hundred million (the amount of TRADEABLE money large brokers have like fxcm, dbfx, oanda, and so on) isn't enough to stop hunt.

[Skalpist]

Market Makers stop hunt.

This is WIDELY KNOWN. FOR MANY MANY YEARS.

You think your six months of false research, probably didn't research correctly first of all, is worth anything?

Dude, stop hunting is a normal accepted tactic of market makers, it's a fact. Read your ****ing contracts.

Good day.

FXCM is a market maker and one of the largest retail brokers on the planet.

Please go to their website and find out how much tradeable money they have on hand, then post it here for us.

Like I said, if you think brokers stop hunt, can you attempt to prove it is even POSSIBLE for them to do so?

[Revone]

Brokers do not specifically stop hunt you. They aren't out just to get you. But how do you think market makers make their money? It's their market, you play by their rules, and one of their rules is stop hunting. Another is spreads. Another is sinister tactics like freezing your platform and putting a freeze on your trades during high volatile moves in the market, betting against you on every trade.

Basically a market maker is a casino. They will do everything they can to better their odds.

Just because Oanda has massive capital doesn't mean they are safe. Give me a break.

[Skalpist]

Market Makers stop hunt.

This is WIDELY KNOWN. FOR MANY MANY YEARS.

It has been falsely claimed for many years. That people claim something to be so does not make it so.

Lots of people claimed the earth was flat and the center of the universe yet no ships ever fell off the edge.

Here guys, let me do your homework for you ...

$145,072,098 In Capital (Assets Minus Liabilities)
$179,381,756 In Operating Cash (Excludes Client Funds)
*from the company-profile.jsp page on fxcm's website

I don't know whether to find it funny, or sad, that you believe a company with a 150 mil balance sheet and 180 mil in cash on hand has enough capital to stop hunt. Even if they placed EVERY PENNY THEY HAD into a single trade they'd be lucky to move a currency more than 2 or 3 pips.

Folks, retail brokers DO NOT have enough money to legally stop hunt. They don't, the proof is in front of your face. They ONLY way they could stop hunt would be if they artificially manipulated the price on their platform.

However, that would be illegal and all too easy to determine that they did it.

Private equity firms, hedge funds, major institutional banks ... those guys sneeze in the markets for more money than fxcm has ALL TOGETHER.

Retail brokers could maybe stop hunt IF they all teamed up ... lets say the largest 20 brokers ... then, maybe if they all acted together, they would have enough to do it.

That would require however that NO ONE at any of those brokers blows the whistle ... rather unlikely.

I tell you what. Lets take this in baby steps and make it easy on you. You prove, with only 180 mil in cash on hand, how it is even POSSIBLE for a broker to stop hunt.