akeakamai — puhleeeeze
most institutions make 400% and pay their customers 10% if that much ---- they are in bad shape because of STOCKS and overdependence on housing but why do you think theyre doing forex now ??
[B]the TRADERS did fine[/B], the management held in a bubble WAY too long and should all be shot for being so stupid to repeat mistakes that come along every 20 years !
Why is everyone always the VICTIM of stop loss hunting?? Like there’s some boogie man waiting to grab your stop losses like a bandit in the night! If it’s so easy, maybe you should try stop loss hunting yourself! Be the bandit in the night yourself, get ahead of the competition, never be the victim-never be the trader holding a FX contract that is bleeding your money all over the floor.
Such blatant fear-mongering. Anything another trader can do in this market you can do, and when you actually try it and realize it’s not as easy as the fear-mongers make it seem, you will realize there’s nothing to be afraid of, only opportunities to discover and profit from.
Do institutional traders with 20 years experience really, I mean [I]really[/I] have to worry about their own broker hunting their stops? I thought all that trading capital would afford them a higher grade of broker than two-bit FX bucketshops.
enjoy and trade well
mp
I want to keep this thread alive, because I for one know what I don’t know, or at least I think I know 
MP, thinking about holding a trade for months or even years, I understand the principle and I fear there’s no simple answer to this, but how can you possibly have (hold) the conviction of a trend over several years? By means of an example:
I was bullish on EURUSD for the last year. It had been that way for 6 before it, no reason to change. Then on 8/8/08 - I remember it clearly - the trend changed, into what I can now say with hindsight was a flight to safety into US dollars/China meddling around. That now appears to be over (again, we’ll see). But, and before anyone chimes in and says they saw it coming, every monkey and their wife was calling a top to that bull run on every correction for several years before it ended.
I was caught on the wrong side of it. Happily, I did use stops otherwise I’d have been completely wiped out. But I did hold conviction in my perception of the long-term trend. It took two significant technical breaks and a string of losing trades before I finally relented to say the tide had turned.
It seems to be you have to be either very nimble and quick to change your mind, in which case you end up trading every correction thinking they’re a change of the long-term trend, or like an ocean liner that can takes ages to turn around (but misses the start of the trends).
Here is what I think about modern day stop hunting. It is not so much the broker after you personaly per se…
What happens is this…
Technical traders place stops in a similar spot for example 2 pips outside the last candle or behind a support or resistance line. This is common and alot of people pick similar areas to place there stop loss order.
Price as you know moves up and down constantly. The broker’s feed is not true interbank rates so then it can be said that the price is strickly your brokers price and in fact we all know feeds vary according to broker.
What happens is the broker will drive the price towards a common stop loss area (remeber the 2 pips outside the last high or low) If the market is moving down then a stop is really a buy. So when price is moving up (against the trend) when it starts hitting that stop zone it is equal to people buying (long the market) Do you guys follow me so far??? If you are selling, to get out of your position you buy.
So what happens when alot of people buy…
Price moves up right?
So as price moves up maybe it hits more conservative stop loss orders but there are less of these so the market doesnt move up as fast then after a few minutes of this price will continue to drop again because there are still sellers or still short sentiment or whatever but the difference is now the market took your money as a tasty appetizer and you are on the sidelines feeling aggrevated to be stopped out only to see price continue in its original direction.
Be honest folks how many times have you been stopped out only to watch price continue in your favor???
I don’t think stop hunting exists like it used to but those spikes in price are a commonplace function of the markets and it is coz the brokers know where these stop loss zones are and they do move price to hit those zones.
Mmm… I think it’s slightly different - if they price shade their customers, we could all get together and arbitrage that broker to extinction. Now that would be a plan…
I run an aggregate feed through Esignal, which is basically all the major banks price feeds glued together. I get to see the extreme highs and the lows of price.
My broker uses Deutschebank as their feed. Because it’s only one bank, it’s like seeing a compressed feed; lesser highs and lows. The broker never, ever, spikes price to anywhere beyond those interbank feeds (well, not that I’ve seen in 2 years with them). They’re not the best broker in the world either!
Banks of course do run stops, but I suspect it’s the same levels in a retail environment as as it is higher up the food chain - the gob-smack obvious levels at S/R, which is what makes trading S/R so profitable. That’s why it appears like your broker is running stops - in fact it’s just the banks running the same levels the world over and piping that feed to your broker.
MP, I (obviously) strongly disagree with you, but just wanted to thank you for remaining calm and downright pleasant in the face of a lot of opposition.
triphop, I couldnt have asked for a nicer nor prettier example fo explain what happened - - - - thank you for making it simple.
First off — Ive been thru a bunch of recessions/depressions/downright big holes in the ground/ over many a year — even been thru a bunch of greenies “soft landings”, and survived because EVERY TIME IS THE SAME — everyone says THIS TIME IS DIFFERENT, but until humans become more advanced than we are, we shall react to “things” pretty much the same way. So fundamentally, i was pretty much prepared for what was to happen !
Not to call it a prediction, but everyone was worried about the US economy (seems they had a reason) and while i took note of it, i kinda mentioned to everyone i kinow that if they thought we were bad, JUST WAIT ! Europe and the rest of the world had followed us this way for more years than most of you have been alive, and lo and behold, they did it again, almost on CUE ----
BUT ----- aha ---- I KNEW WHERE THE CUE WAS !
enclosed are two charts ---- KINDLY excuse the complexity, but anyone should be able to see how the candles are moving, even if you need to squint !
the first chart is a daily chart where each bar represents 3 days while the second is a monthly chart — kindly notice the arrows BUT MORE IMPORTANTLY, notice the lines which are the TOP, MIDPOINT and BOTTOM of the multiyear LRC, of which i speak with soft and glowing terms from towers, minarets and castle battlements ! The arrows point to the top lines, and show where the currency began to go down which appears with what you stated about august’s drop — as you can see by the charts, there is more than one reason i count on charts and NOT on fundamentals, because people had been talking about this problem with Europe, and how the dollar was getting stronger for weeks before the PRICE HIT THE TOP RESISTANCE LEVEL AND THE BANKS BEGAN SHORTING IT !
WHEN one is approaching THAT point on a chart, especially when all your charts AGREE, then the foolish and wise amongst us had better do “something” ----- in that case my something was to SELL and sit back to see if i was a fool or the most talented trader in the world. A second, braver method, is to go SHORT, which is a bit dicey at the beginning of the move, what with the ups and downs of traders getting out, getting in, and all that happens there !
ok, dont know about talent, but fear made me sell and fear was the RIGHT thing to listen to !
I didnt get in at the very very very very START of the new trend, but then i didnt fly into space with a LONG position that would now be down $7000 or so, which i DO NOT consider a pittance !
anyway, thats how i work it, and it wouldnt be a bad idea if you might think of working it that way also.
btw, the LRC WORKS on ALL timeframes, from a quarter of a min to the daily !
enjoy and trade well
mp
ps — thnx for the compliment about being peaceful here — i dont attack unless attacked cause im just one of the sweetest guys around — just ask me !
before my latest signature, i was known as CRUSTY — crusty on the outside and sweet and soft on the inside, like fresh baked bread !
LOL
[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !
As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !![/I][/B]
EU oneyear 3 day.zip (51.4 KB)
EU one month.zip (40.5 KB)
AWWWWWW — MONGO FEEL ALL WARM AND FUZZY INSIDE !
LOL
mp
Stop hunting is a myth or fable. The brokers know where the stops are. The small traders do not have the ability to hide orders. Therefore, the brokers do not have to “hunt” for them.
“Stop running” can only happen at a particular broker since forex is not a consolidated market. But remember, there is more than one reason a stop exists:
[ol]
[li]stop a loss
[/li][li]protect a gain from eroding past a certain point
[/li][li]enter a position at a certain level
[/li][/ol]
SEMANTICLY, YOURE CORRECT, but if my stop is taken out, i dont really care what words are used, cause i sure know WHAT MY WORDS WILL BE !
mp
not ONE single comment on the LRC ? ? ? ? ? ? ? ?
HAS the world gone to hell in a handbasket ? ? ? ? ? ?
anyone alive out there who thinks this is an optical illusion ?
mp
mp
I’ve been reading your posts. I was about to ask you about using Stops when I found this thread. I had been drawing trend lines on the 1 hr chart. Now I’m using LRC on the 1 and 4 hr charts. Just drawing trend lines seems to be a bit subjective, but LRC makes the trend much clearer.
Even though your techniques are way advanced from where I am, hedging your trade and no SL, I have gained a lot from learning about them. I think it’s important to get a broader perspective than just the little steps I’m trying to master. It’s like watching a great pool player. It helps to get you to the next level even if my next level is still a beginner.
I’ve only been using LRC and the SHI channel for a few days, but my confidence is building already. (Is this a right-brain way of trading? Or does that dancer spin clockwise for everyone?) I’m trying to only trade with the trend, rather than trading the retrace also. It means lots of waiting, so I’m not sure if that’s a good idea.
Thanks for sharing your wisdom,
condor
Maybe if you posted your template, we could watch what you are watching.
Do you need instruction on how to upload a template?
But this is a STOP LOSS thread so technically LRC discussions are OFF TOPIC.
:eek:
[I]"the traders at Barclay (the ones i trade against for the most part) have extremely large monitors which show the clusters of stops and where they exist, although for those professionals, they already know without looking !
with GLEE they will simply allow a fast “overshoot” of a price to hit a GROUP (not just yours alone) of stop losses — its just PART of the game of trading ! Theyre not BANDITS in the night, but bank traders doing what the boss wants !"[/I]
MP, my point was this: What if me, you or any other trader learned to recognize where there would likely be a large cluster of stops. It’s not hard, just a matter of practice, experience, and close observation.
Now what if I were to let the price overshoot, just as the bank traders are, then jump in when they do. Does that not mean that I am “hunting” those stops??? I’ve done it before, it’s been very profitable, and I’ll do it again whenever I see the setup for sucha stop cluster run.
If you can’t beat them, join them! When I look at a chart, I look at what entries turn out to be profitable. When I start to see a pattern in the setups for those entries, I have an edge for future trading! Bank traders may have many advantages over my retail platform, but THEY LEAVE FOOTPRINTS IN THE PRICE and a careful detective can deduce their actions from the price movements, and learn with much experience what the profitable setups look like.
There’s about 20 different topics in this thread
MP, thanks for your detailed posting. Your charts look like confetti streamers to me but I take the point about the LRC! I have a learned hatred of indicators of any description (except the ATR) because they wasted so much of my time, but in the spirit of open-minded trading, I’m going to experiment a bit more with the channels. (OK, it’s not strictly an indicator…)
Akeakamai, I think you misread my earlier posts - I was talking about why some people don’t use stops because the debate was getting a bit polarised. As I said - I use stops, you use stops, they work for you, they work for me.
And if anyone reading is wavering thinking about should I shouldn’t I, take a good look at EURUSD in the past week and have a good look at the potential damage it could have done to your account if you were the wrong side of it. A lot of people will have closed their accounts this week, no doubt about it.
let me try to finalize this
the ONLY advantage i have over most of you is simply MORE YEARS trading
i aint particularly smarter or better, and my methods are very VISUAL, in part because of the right brained thing and in part that that right brained thing allowed me to be a director of photography in the film business for about 30 years — so i am a VISUAL PERSON !
being VISUAL, things like price movement, the LRC and trendlines become VERY important to me, because LOGIC and mathematical thinking are beyond me — im far more an artist than an accountant !
that settled, ALL NEWBS SHOULD USE STOPS, even though i havent a clue as to where to put them – if youre running into problems with a LOSING trade because of your stops, then loosen them or find a guru who NEVER has their stops taken out.
If one trades with the TREND, then no matter what happens, you wont have a losing trade — because of the size of your account, you may have to sit on your hands for a few days until your price actually reacts the way you believe it should so that you dont blow your margin, BUT THE TREND IS YOUR FRIEND, and one of the most valuable things you can hook up with.
i mention the LRC, only because it is a VISUAL method of watching the TREND, and therefore is a very valuable tool.
ONCE you have waved goodbye to graduate school, you can begin to think of what i have taught, and try and see if it works for you, because it simply may not ---- but with a large dollup of education and experience and most especially in the shorter timeframes in the beginning, you will find a sl to be a pain and waste of time.
the LONGER timeframes become a decision based on how much you can make verses the amount of time to make it, and only your own trading and head can decide what is what and what you shall do !
AVERAGING is a highly skilled and well used “technique” but NOT for NEWBS ---- in fact, everything i teach except my beloved LRC is post graduate work.
THE LRC is a real “save your butt” chart overlay, just like fibs and s+r, and if not used is simply something foolishly being thrown away !
enjoy and trade well
mp
[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !
As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]
You’ll never tire of this. History will repeat.
enjoy and trade well
mp
[B][I]If a mans only tool is a hammer, he tends to see every problem as a nail – Abraham Maslow[/I][/B]