This thread isn’t about wether stop hunting, by your broker exists or not. This thread assumes that they indeed do stop hunt and try to fake you out of your TP points. And that they have programs to track your habits and where you usually put stop and TP. (So please don’t turn this into a argument about wether it happens or not)
I’ve had some thoughts on how to fake out the stop hunting and TP broker fake out. I’d like to put my thoughts down and if anyone has thoughts about it, or even first hand experience please chime in.
I’ve had trades come within pips of my SL and then go my way. I’ve also had trades come within a pip of my TP and the reverse hard back. While I don’t think it’s always the broker stop hunting, my ideas i’m forumlating would probably help anyways.
Here are my thoughts on how to avoid getting stop hunted. Some of this is borrowed from nickB.
Good entry…( of course.) do your best to make your entry somewhere where momentum will take it in your favor, or at the very least have price rest without going negative, before going postitive.
figure your SL mathmatically somehow off of the daily range of the pair, NOT just what you are willing to lose. Say your pair moves about 100 pips in a day, if it’s already moved some percentage of that, it hard to move price back across the whole daily range.
Nick B uses 50 or 70 pips on GBP/JPY
Make your SL larger than your TP. This makes it more probable mathmatically that your TP will get hit…if your entry is good. [B] ( A tight SL and a large TP is a recipe for getting stopped out often and losing a lot of trades) [/B]
Don’t place a SL or TP at all. Place alarms x amount of pips before where you want to stop out if the trade doesn’t go well. What this allows you to do is watch price action and use your brain to decide if you think the trade will go back your way or keep taking your pips. This goes hand in hand with momentum and entry. If you placed a good entry and get momentum, you’ll get a nice easy trade that goes your way, right away. But, often price will range and even spike before ultimatly going where you thought it would in the first place.
Now this take practice and an objective mindset. If you find your self not being able to read price action well, or hoping and preying and just letting it fly past your alarms, then you are better off with an automatic stop loss.
You can also use an automatic, “O CRAP SL,” that is larger than your actual manual SL. This way you have a something against a huge spike or internet outtage really hurting you.
Now to fake out the stop hunters I’m thinking it’s best to put odd stops in where you know they don’t have a chance to get hit anytime soon. Then take them out again. Then put a completely different one in. I’m thinking no way they have a person monitoring traders, they probably have some sneaky little programs that log everything you do. So, not only will I put in odd stops, but I’ll take profit at different levels all the time and even put in TPs I know won’t be hit. I’m thinking if they have bots collecting info and messing with you, this would be a good way to screw up their data.
No automatic stop loss or take profit. As soon as the trade goes postive by x pips move the SL postive. If it goes bad manually close or put in SL after price has passed an alarm.
The easiest way: Trade such a small percentage of your account that you can wether huge drawdown and hold on to trades if you really think it will eventually go the way you thought. Not really good trading, but the easiest way to avoid stop hunting.