[B]Hi
I am new to, and interested in
trading Forex using automated EAs.
I have discovered that when using
those EAs Brokers can interfere when
they know your SP Stop Loss, and
TP Take Profit levels.
Does anyone know how to make
SL, and TP invisible to Brokers?
Please let me know.
Thank You.
Frank Richardson
Canada[/B]
Whether it’s invisible or not, if the broker and/or market maker is stop hunting, they have a general idea on where price needs to go regardless if they see your stop or not.
From what i’ve read Fapturbo EA can make your TP/SL invisible to brokers. Don’t flame me. I’m not promoting them, just informing.
Speaking from a software development viewpoint (but not a Forex expert viewpoint by any means), my guess is that by “hiding” SL/TP they simply mean that the order is submitted to the server without any stops, and the software simply jumps in with the close order when the appropriate level is reached.
That said, if a broker is hunting your stops (which I would assume means spiking the rates in short increments and watching for orders to be closed suddenly), it doesn’t matter whether or not you told them where the stop is, the order is still going to be closed when the stop is reached - which is really the purpose of stop-hunting, to close your order and thus increase broker liquidity without changing the rate over the long run (as best I understand it).
If you are concerned about stop hunting, why not just use a broker that is a non-dealing desk? No stop-hunting concerns to worry about, as there’s no desk that needs to maintain liquidity, and no custom-crafted rates - just the market rates.
why to worry about hunting. Actually I don�t get why for a broker are that useful our sl and tp points. As a scalper, I care how fast my platform works and of course, have sl and to to set on
why to worry about hunting. Actually I don�t get why for a broker are that useful our sl and tp points. As a scalper, I care how fast my platform works and of course, have sl and to to set on
Well you’re right, as a trader SL and TP performance is very important, but there’s a good reason for a broker to care about your SL and TP levels too.
(Someone correct me if I’m wrong on this, I’m very new for forex).
Stop-hunting is price manipulation with the goal of getting you to close a trade. If you have a trade open, you’ve already affected the market. You’re just waiting for everybody else to affect the market in a way that makes (or loses) you some money. If lots of people have trades open, then there’s few people left to actually move the market and things slow down.
If you are trading with a dealing-desk, that broker is playing the market against you, and setting their own rates (as opposed to the inter-bank rates). It is in the interest of the dealing-desk to have high-volatility… volatility means more people buying/selling, and thus more spreads to collect.
To encourage volatility, the broker just needs to trigger your stops by having the price go past either your SL or TP (I don’t think the broker would care which one… I could be wrong though). So, if you are trading with a dealing desk and you’ve told them (via your trading application) exactly where your stops are, it would be trivial for the broker to say “hey, let’s close x% of the current open positions that have a stop within y% of the real rate to increase volatility and encourage more trading” and manipulate the price accordingly.
If you don’t tell the broker where your SL, TP levels are, then they can’t do that quite the same. However, I have a feeling that stop-hunting in the sense described above (looking at your order and “cheating”) is probably illegal (or at least not allowed by licensing/certifying agencies). As a software person, my guess is that they just spike the price up and down very quickly when they need to increase volatility. These spikes wouldn’t affect the average rate, but they will trigger stops, and they don’t need to peak at your cards to do it.
Anybody have any better info on the practice of stop-hunting? I hope I’m not completely off-base here!
I’m curious about this myself, as I recently saw some pretty strange things going on w/ my charts and SL/TP orders… I chalked it up to setting my points at the same place as everyone else, however, I can’t get it out of my head that my broker may have be hunting…
Is this a common occurrence? I’m using oanda as my broker and platform if anyone has any specific info regarding them.
Oanda is a dealing desk so everything plays.
The most recent post on this guy’s blog (which is very anti-dealing desks in general) deals with stop-hunting. There’s a lot of interesting stuff on this blog, but I don’t know how accurate it all is. In one post he compares dealing desks to exchanging money at the airport. Sure, it’s forex, but in reality it’s just some guy behind a desk saying “I’ll give ya X USD for Y EUR” and adjusting the rates so he always makes a profit.
(I’m not affiliated with either site, nor is either site selling anything.)
Thanks for the info. I’ll check out those sites.
Oh come on, link violation? Seriously?! I explicitly stated that I’m not affiliated with either site, and both sites are forums/blogs. Neither sites sell any service or product of any kind. They’re intended to help people understand and choose non-dealing desks versus dealing desks… if that’s an unsuitable link on a forex board, what’s suitable?!