Brokers stop hunting trading against the client

Beginner Questions
1

Hi
wonder if i can get more knowledge about this matter.
I have been reading as many past threads as i could in the past few days.
I can see that many traders won’t commit themselves to a market maker broker.

How do we actually know if the broker is hunting your stop ? Even a STP or ECN one ?
I am currently trading with Vt Platform, but not sure if can mention the name of the broker

Few weeks ago I became suspicious. I was looking at my charts and looking also at different charts from different platforms and websites, on 7 screens, and realised that when my stop was taken out on Vt platform live account, the other charts showed still 5 pips to go, before the stop would triggered.
Eventually what was winning trade of 22 pips, 3 mini lots turned up to be a loss.
Stop was just 15 pips below and on other charts it went down only 7/8 pips.

Obviously am not absolutely certain if someone did it or not …However seven different screens cannot lie.
How do we know for sure if a broker is hunting stop to make you lose, or a broker is hedging the position against you ?

Does it mean that if it happens to me it is also happening to someone else ?
And how does it happen, that a broker manage to see when you buy and buy when u sell ?
Does it mean the candles on the chart “Before Opening the Position” are right, the stop is also right, but the next candles and price movement is being manipulated ?
Really trying to figure this out.

Does this happen often with market makers ? Does this not happen with STP/ECN brokers ?
Wish you can shed more light on this .
Wish to transfer my funds to create a new account with new broker and platform and would like to get some advices about this

thanks.a lot

2

Ok, this may interest you a little.

I have been implementing a trading approach that when back-testing needs to be done by hand. What I mean is that there is no EA, and you manually look for the entry price and exit price that you would have taken. Discounting the fact that you have to be totally honest to yourself I did find that the following happened on a few occasions.

My Take Profit Levels were less than 1 pip away from being hit, and price reversed to my Stop Loss - over 50 pips
My Stop Loss Levels were breached by less than 1 pip, and price reversed to hit my Take Profit - again, over 50 pips

The interesting thing is that if you were trading these trades live, and the above happened you would naturally assume that you have been a victim of either Stop Hunting or you broker knows where your Take Profit Level is and stops it from being hit. It’s totally fine, I would also think the same.

The above has happened on a few trades when i was back-testing, and in a way im glad, it shows that this sort of ‘unlucky’ situations do indeed occur. Now this might not answer the primary question which is “does your broker Stop Hunt”, but it does offer some reassurance as these situations can naturally occur.

Now going to the point you mentioned about an ECN. A ECN broker has no influence on your stops or profit targets, after all it is no dealing desk execution. True ECN accounts can require much more upfront capital, such as opening a $20K account or more. If you are looking at opening a trading account with less than $20k then you will be looking at a non ENC account. Either way, choosing a reputable broker will help immensely with avoiding these common misconceptions.

3

Ther is not a way to know. The better is to have a great plan and avoid scalping and daytrading.

4

woooo…stop right there! Avoid day trading, don’t be so ridiculous! Lets not start a side argument :wink:

5

Right on Mr. Gone! Did any of u traders ever tried to trade without stop/loss? If u manage to trade without it u no longer have to worry about anyone hunting u. Of course for that u have to have a great plan and be very diligent when u trade. U should mostly be afraid of not getting paid rather than your stops being chased by your broker. It is true your broker makes money when u lose bur so do they when u win. So the more u are on the market the more money they make. Rhat is why for me sounds crazy when people say their broker goes practicly against them. So if they would concentrate on to wash u out of the market they would lose u quicly as a client and so would they lose the source of income (the trader). But hey everyone has the right for their oppinion and feelings and I’ll just stick with mine.
Safe trading to all of u out there… :wink:

Sent from my iPhone using BabyPips

6

I still very much believe, and this is because I do it, that you can day trade and be very successful at it. I always use a Stop Loss as standard which goes into the trade prior to execution. If you are trading a good system then your stop loss will give your trade plenty of breathing space, and as a result it should be hit on less occasions.

I trade up to three times a day, with each trade lasting a few hours, and I’ve never had a problem with the ‘so called’ Stop Hunting!! Ive been trading the same approach for over 10 months with fantastic results on both trade accuracy and also ROI.

So with the correct approach, day trading can indeed be very profitable.

7

I trade with 20 stops fixed and don’t have a stop hunting beef to speak on - speak on your strategy if you really want something constructive from this post. The same time you were hunted, everyone else was hunted yet another trader has your money in his/her pocket.

If you say “within 5 pips of my stop” unless your a M1 scalper using 5 pip stops, then the position(s) you speak on had already moved against you. Were u trading against the trend? Were you trading in a range before momentum established a push in the direction of the trend? Were you trading above M15 with an inadequate stop for market conditions at the time you entered? Did you try to call a reversal and get tossed out in an extension?
Did spreads widen to hit your stop? - trades in quieter times or opens easily get caught up in variable spreading hitting stops.

Don’t post about stop hunting if you cannot post also information on the relevant context, preferably with chart clips, surrounding the trade or trades that offend you. For all we know your entries are plain bogus and your just airing out. And yes there is stop hunting but it’s not personal - if your always caught up in it - look to your strategy because the main issue lies there.

8

Sorry i clarify a bit more. Am just a newbie and have been trading for a couple of months.
As i said my stop was not 5 pips but 15 pips “below the entry”(addition). I use the word stop hunting because thats what i have learned…
I am not saying this because i was angry or so as the trade went against me. As someone said, this can happen obviously.
I was looking at different screens of the same pair and time frame (15min-5min)and using three different platforms, but the trade took place with the Live account.
Ok here is what happened.
Bought Euro at 1.3060 / Stop Placed at 1.3045 (15 pips below price and 5 pips below pivot) No profit level placed,cos i will be out after 7/8 pips (depending on the day).
After few ups and downs a quick down spike, took out my stop just 1 pip below at 1.3044, then price quickly went up again 5/6 pips to 1.3050, psychological level .
All this is fine and a trader must put into account that some times things go wrong , the market is the boss and not what we think .
However the charts platform of the live trade did not match the other free web charts offered by websites i use, and did not match what happened on the other platforms. On those charts the price never got to 1.3044, but it stopped exactly at 1.3050, and after bouncing for few mins, it went up to 1.3075/6
Since taht day i have been emailing the broker few times, and been reading reviews about Platforms and brokers and found the reason why most experienced traders keep away from Market Makers.
Am now in the process of changing broker and Platform.
Any advices appreciated
Thanks a lot

9

Sounds like stop hunting.

10

Or… you can scalp the living crap out the markets with 100% certanty that your not being taken advantage of by your broker in any way, shape or form…other than the price of the comission you pay for the transaction.

I scalp. I make a 6 figure income doing it. on any given month, I have over 250 trades. My average hold time is less than 50 minutes per trade. And I’ve never had a single time my broker has ever come close to trying to thinking about stop hunting me.

But then… I trade forex in the futures market. Not the spot market. The only difference for my purposes is the ticker symbol I type in to pull up the chart…oh, that and the 13%-17% MORE money I keep because I get a massive IRS discount for trading currencies in a regulated and standardized futures contract rather than with an over the counter unregulated dealing desk.

but of course… i can’t buy a “nanolot” and trade fora few cents a pip. A single eur/usd currency contract trades at $12.50 a pip. Which…I might add… is mroe than enough to make a decent middle class income if you can capture even 10 pips on a trade…twice a day.

Oh how the sun shines brighter and the birds sing prettier when one trades a REAL market, with a REAL broker, as opposed to a non-existent market with a bookie.

Jay

P.S. For “Proof” that scalping works. see this link, and read post #6

http://forums.babypips.com/newbie-island/42180-candle-stick-signals.html

11

I’m with Golden… sounds like you got “brokered”.

regardless of wheither it was out of malicious intent, sub-par technology, or just plain ol’ liqidity issues increasing spreads… it sucks to not know…and also…to know that it COULD have been them laughing at you.

So just stop it. open a regulated futures account with a centralized exchange, direct order routing, and no intermediary between you and some sorta fake market.

or do the 2nd best thing, and get an account with a bank that provides services to serious traders to access the interbank as directly as possible. Though this can run several thousand a month from what I know…since your essentially “leasing” a terminal to trade on the interbank itself.

What? not ready for that level yet? find an ECN…one in the U.S…who also offers some sort of regulated products as well to their clients. They are going to have to meet a higher standared with other marketplace services…and therefore likley have the resources and comittment to standards that escape the notice of many of the dealing desk types.

now… with any of these options… you’ll likley need a minium of $5 grand to have them talk to you. and i’d say more like $15k - $25k to have any hope of having enough capital to survive.

But, if your really really serious about your trading…and can’t “afford” either the emotional or fiancial price of the occassional, rare, unexplainable price move… then you’re gonna have to pay for it.

retail forex is for the masses with a weekend gamblers bankroll. The vast majority of full time traders I know of do NOT use retail dealing desk forex “brokers” for the bulk of their income. They happily pay the extra, or whatever, because they run a business.

ANd a business takes an investment :wink:

Jay

12

I have traded with a few brokers, and believe you me there are some unscrupulous ones out there, I have been stitched up, they will give you major slippage and stop you out and **** up on your trades, but it is not common practice.

There is no difference in practice between ECN and a market maker, market makers certainly don’t need their clients to lose money on the whole so that they can make a profit.

A good market maker can easily be better than a poor ECN, besides how do you really know an ECN is an ECN? I don’t particularly care anyway, my broker works great and that’s all I care about.

13

I am changing broker and found a good one … apparently is offering low spread, $100 usd min acc / trade silver and gold too, oco orders ok and scalpers welcome. The problem is they are not regulated and they can still offer segragated account why ? I thought a non regulated broker would not insure your money right ?
It is also Ecn, which normally dont trade against the client, but they charge a commission for it …
In regards to my furure trades, i have set up a Dvr, to monitor all screens on different time frames.So i can proof it if it happens again.

Wonder if a someone here would be so nice to explain few things:

(1) Would you trust a Non-regulated Broker who still offers insured account, and has also 98% positive reviews on all websites ? Often this might happens with new broker,and this one is trading from 2008.

(2) ECN charges commission ex: 3 usd per round lot, (100K) but if am trading with a mini account and mini lots starting from 0.1 = 1 pip 1 dollar, how is he gonna charge me? by % or by taking the 3 Usd when i reach the totat amount of 100,000 leveraged ?

(3) I will not go with a STP broker cos i just found out, that though, they do no trade against the client, the Hibrid model used, allows the broker to act as a market maker …“only” if the client is trading with “mini lots” and mini account.
I might be wrong , and i have learned all this stuff by reading online.

(4) Another point is : Does it matter to have the platform with the broker server on Est time 5pm ? Gmt or 5pm platforms do not show the same closing for the daily candle, and if you are a follower of pin bars, the formation will be certainly diffrent, right ?
Have noticed anyway that when trading 15 min / hourly charts, it does not change, but it does when trading on the 4 hr chart and the daiily one …

Thanks a lot for shed more light .

Anyway these are my parameters for choosing the new Broker:

ECN
MT 4
Regulated fsa/Fca
Support Live
Country: Will stick to the biggest, historically: USA / Europe / Switzerland / Australia / New Zelanad / Canada ? not sure…
Min Acct between 250-500 Usd
Low Spread on many, though i expect to find over 6 pips Gbp-Jpy and Nzd-Usd
Scalping Welcome
Trading from Charts option
Stop Buy / Limit BUy and Stop sell Limit Sell + OCO orders + Take Profit + Stop Loss
Abotu slippage and no-requotes, an ECN should already have put that into account.
Easy and no hassle withdrawals, not only my profits, but also my funded account money.

14

purplepatchforex
may i ask you the broker you use ?
if possible
Thanks

15

Oanda, and IBFX MT4 UK for charting.

16

For the record, it is quite possible to trade successfully long term without (overt) SL. ‘Sword’ in his posts about space manipulation and our EA at Motif101 on Zulu trade both use such approaches. Essentially the idea is

  • don’t place SL with the broker
  • have predetermined levels where you double or hedge
  • be absolutely systematic about entering according to your rules so that the numbers perform as you expect

Note that this can work if you treat a single trade and all related doubles/hedges as a basket and close them all together. Alternatively you close all the single/double trades and leave the hedges in a situation where your trade bias has reversed.

All that said, I agree with Jezzode - these situations where it appears your broker is hunting stops occur in real live trading with no malpractice from the broker. It’s too appealing to us humans to think that all winning trades are our skill, and all losers are broker fraud. Don’t forget at least some winning trades are luck and many losers are bad strategy…

17

Exactly! That is why I trade without S/L… :slight_smile:

18

Another comedian! :wink:

19

Yeah well just bcause u can’t doesn’t mean others can’t smart ass… :slight_smile:

20

Huh… funny…I trade with a stop loss, and still do extremely well by most standards. I could probably increase my current income 35% - 100% per month by trading without a stop…, no doubt. Problem is, I am under no illusions that I am a perfect being who will never make a single mistake that could wipe me out.

I also trade with a position size large enough to make a considerable income off a fairly small (relatively speaking) account.

Some try to get around the “no stop trading” problem… by trading teeny tiny risk amounts. That’s fine i suppose. Just hard to make really significant returns in this case.

I’ve known of a few who trade essentially without stops… on occassion even some pretty high end money managers (read 9 and 10 figure portfolios), and I can safely say that the vast majority end up wiping out. I Read about one guy who did this with 100 million… was a coffee trader, and appearantly knew everything there was to know about coffee…including who was shipping what, what farms were producing, inside info, the whole 9 yards.

He wiped out.

Do you trade without a stop attrium? or just without an automatic stop in place…? Some use mental stops… this is still trading with a stop. Just not an automatic stop.

One who trades without a stop at all essentially is saying “I will hold this position regardless of whether it goes against me, until it reaches a value of zero, or until a margin call is made, or until the end of the world”

No stop means nothing would shake one out. No amount of loss. No emtional “uncle” point. No stop is no stop. period.

I knew of a lady who traded without a stop by owning GM stock. Pre-crash GM. She was worth 7 million. She lost it all in the GM Bankruptcy.

Trading without a stop requires perfection, or an extraordinary amount of self delusion. Trading without a pre-set stop requires great discipline, but is totally doable.

I, for one, would rather trade with a stop, be it pre-set or mental, and just learn how to enter the market at a place when I’m right, I won’t be stopped out. This way, I can get small 20-50 pip stops on 20-200 pip targets.

I find most who trade without a stop do so simply because they lack the skill to gain an entry with an acceptable amount of risk. Eventuallly, these types wipe out. It may take a few years…but the odds have a way of catching up on folks like this.

So, if you don’t mind for the rest of us… would you clarify exactly what you mean by trading without a stop?

Jay