Stop hunting?

Actually this is for Phil since he has a Oanda account.
If you take the Oanda demo they give you 100’000 units.
To make the demo risk equal to a $1000.- real account would you set the demo account to a buy/sell order to 10’000 units by default and therefore could see how the system works on Oanda?
I just want to get the same % risk ratio between demo and real accounts.
I assume a $1000.- real account is what most people would start out with.
Thanks, appreciate your time.

You could do it that way, just multiple all your trade amounts by 100.

You can also reset the Oanda demo to different preset dollar amounts. I believe $1000 is one of the options.

It’s been over a year since I ran my Oanda demo but I believe it’s in the “Accounts” menu on the main toolbar. It’s called “Reset Balance” or something like that.

Or you could even make some bad, overleveraged trades on purpose to bring your account down to whatever amount you wanted. :slight_smile: I actually did that cause I wanted to demo with $50, which is what I planned to go live with.

The banned poster, mp6140, who claimed to be very experienced (grave doubts about that) did do one credit on this forum.

He always insisted that your demo funds = live funds.

I totally agree with his logic - to get a true comparison of how you will go live.

So somehow, you must set your demo funds = live so that it will make sense to you.

There is no point in trading with $100 000 if your live funds are only $1000. :slight_smile:

I found it, had to deduct 100’000 units and add 1000 units again (1 unit =$1 only in US/xxxxxx currency’s of course). Ended up with the profit I had already in the account except now it will be more real.
I did not fund the account yet because I need a different demo account that has the same timeframe (GMT). FXDD is not GMT and is 4 to 6 pips off to Oanda quotes.

Happy Trading All. Oskar

This would have worked on GU 1.6 the other day. Thinking I might look into it a bit more. Would you call these major levels?
1.1, 1.2, 1.25, 1.3, 1.4, 1.5, 1.6, 1.7, 1.75, 1.8, 1.9, 2.0
Same for fiber

JPY pairs I’m guessing 100, 125, 150, 175 but could include all the others in between?

I would guess once price has been to one level, you wouldn’t want to tarde that level again until it had at least moved to another.

I’m also thinking best tried on the majors where stop hunting is common and traded more heavily?

If you won a trade on this at say the 1.6 pysch level, I’m guessing you wouldn’t place another trade at that level for what…a few weeks? …or maybe until it had reached a new psych level or price had moved away by a few hundred pips?
I mean…you’re suggesting here that the psych levels are every 100 pips with 0.xx00

I’m also thinking best tried on the majors where stop hunting is common and traded more heavily?

Simple rule to build into your system, do not place trades in the same direction price is moving with-in 100 pips of major S & R levels… wait for the break or bounce

An example?
The method above relies on placing trades around pysch levels, which the price is almost certain to test.
I’m not sure 1.xx00, eg 1.6100, 1.6200. 1.6300 etc count as psych levels whereas 1.6000, 1.7000, 1.8000, etc. do. Perhaps the half levels within each one 1.65, 1.7, 1.75, 1.8, 1.85, etc.

Hey, SanMiguel

Thanks for your PM. It reminded me that I haven’t answered the questions you posted a couple of days ago.

I’m not ignoring you. It’s just going to take more than a one-paragraph reply to answer your questions.

I’ll try to get at it later this evening.

Clint

Hi, SanMiguel

When you started this thread, the subject was basically: How and why brokers engage in stop-hunting to rip off their customers.

When I joined the discussion, it was to make the point that most stop-hunting is done at the bank level, not the broker level; and to offer a link to Boris Schlossberg’s article on how ordinary traders can anticipate what the stop-hunters will do, and trade along with them.

The Schlossberg strategy is very simple. It identifies [B]the round numbers which occur every 100 pips[/B] as potential stop-hunting targets. For most currency pairs, these numbers take the form 1.xx00 or 0.xx00. For yen pairs, they take the form xxx.00. Schlossberg doesn’t break it down any further than that.

Schlossberg didn’t say this, but I think it’s obvious that 1.x000 is a more important round number than 1.xx00. And I think it’s probably true that 1.x500 is a more important number than 1.x400, or 1.x600.

But, none of that changes the way the strategy is implemented. If 1.6100 presents a potential stop-hunting opportunity, then 1.6000 and 1.5500 should certainly be as good, or better. But, all three of those price levels would be traded the same way, under this strategy.

Stop-hunting at a particular round number does not imply breaching a support or resistance level. Let’s say the stop-hunters target 1.6100 (from above). If the stop-hunters have identified clusters of sell-stop orders at, or just below, 1.6100, then that price is viewed as a support level, at least by the traders who have placed their stops there.

If the stop-hunters gun those stops, driving the price briefly below 1.6100, that does not necessarily imply that the 1.6100 support level has been broken.

If the price continues down substantially from 1.6100, then the support level [B]is broken[/B]. But, if the stops are cleared out, and then the price rebounds back above 1.6100, then the 1.6100 support level [B]is still intact[/B]. In fact, it is now seen as a stronger support level than before, because it has withstood an attempt to break it.

In this latter case, where the stop-hunting raid was successful, but the support level held, there is no reason why the stop-hunters wouldn’t take another run at it, whenever favorable price action and a tempting cluster of stops offer them the opportunity. As far as I can see, there is no rule about waiting some period of time before attacking the same round number again.

Maybe some of the confusion on this point comes from the trade that Phil described, because in his trade support was broken in a spectacular fashion, and he went on to make big pips. But, a break of support (or resistance) is not a necessary part of this stop-hunting strategy.

In most cases, support and resistance should be viewed as price zones, not as specific fixed prices. So, when the stop-hunters penetrate 1.6100, and the triggered stops push the price to 1.6085 or 1.6080, and then the price rebounds and remains above 1.6100, we would have to say that the 1.6100 support level held.

I hope this answers your questions.

Clint

Yes, thanks!:slight_smile:

The strategy in the article talks about using the 200SMA as a guide but if you’re going to target the in between 100 pip levels 1.61, 1.62, 1.63, etc. it seems better just to use the current trend in the price from the last few hours?
I personally think the strategy is better suited for the major psych levels at 1.6, 1.65, 1.7, etc. However, that’s not to say it doesn’t work at the in between levels.
Think we could use any other MAs in there say 50SMA, etc. as guides?
I mean, you could, for example, instead of targeting every 100 pips on an individual major, target all the major levels (1.x000) on many different pairs and would give you the same amount of trades and maybe better stop hunts? An indicator would easily give you notification of all these. There are a number of times I’ve seen price reapproach a 1.xx00 number only to fall short. Yet almost every time it nears a 1.x00 number it tries to test it.
I don’t have enough experience with the strategy to know which is better.

Before you start making all sorts of changes to the Schlossberg strategy, why don’t you trade it for a while just the way
Boris Schlossberg designed it?

He knows a thing or two about forex — he’s been doing this for more than 10 years.

You’ve been doing this for, what? Four months?


For anyone just joining this thread, the strategy we’re talking about is described in this article from Investopedia:
Stop Hunting With The Big Players

Clint

Lol - I wasn’t suggesting he didn’t but I have right to question/discuss :slight_smile:
The strategy specifically states using the 200SMA so as it moves through 1.6, as an example, you would then target 1.59, 1.58, 1.57, 1.56, etc.
I’m just suggesting that if this is psychology based and that the “rounder” numbers are more ingrained and likely to have more stops 1.6, 1.5, etc. then maybe we could target those on lots of different pairs?

Schlossberg didn’t say this, but I think it’s obvious that 1.x000 is a more important round number than 1.xx00. And I think it’s probably true that 1.x500 is a more important number than 1.x400, or 1.x600.

He also specifically states a multiple trades option, which just doesn’t sound right. I mean once the stops have been hit in the region why would you go again? Too risky that it might bounce, no?

Worked nicely on this one for 15pips + 30pips. On reaching 0.8, it shot up by 5 pips much quicker than the recent 30mins activity. I trailed the 2nd lot but it hit its 30TP anyway. Not bad.

quote from another site:

Lol…

Clint
Been discussing this on some of the other forums and the general consensus, even from experienced traders, was that people don’t put their stops at round numbers anymore. Any big player knows that’s a stupid thing to do.
What are your thoughts?
I’m pretty sure as soon as price hit 0.8 on the AUDUSD today it jumped 5 pips uncharacteristic of the last 10pip movement up to that point, which would suggest there were stops there but who’s to know.
I can see the strategy being split into 2 which is that the market will most definitely test the price, which is the first 15 pips. If it hits stops and pushes through then you pick up the 30 pips from the 2nd part of the strategy.
I’m quite willing to try this as even looking back through the charts it seems it works.
As one of the arguments against was when the Euro came near 1.6 in April 2008, price was all over the place.

Given my choice between:

B testing a trading strategy, first in demo and then live, and finding out for myself whether it’s worth using, or

(B) taking a poll of traders who have never tried the strategy, and using their “consensus” to determine what I think, [/B]

I’ll go with (A) every time. But, maybe (B) is your cup of tea.

We are not the big players though, our stops don’t move the market at all, not even as a collective retail trade unless the brokers are passing on our trades to market. And no, I never place stops that close to a psych line, it would be at least 20pips and that’s if I was going to place a stop and not close it out manually.
A stop hunting strategy relies upon hitting some stops at that level which are for some extremely big monetary amount and the counter argument against this strategy is that no professional in their right mind would place a stop at 000.
Doesn’t mean I won’t try the strategy but a lot of people are questioning the validity.

this still happen now ?

Stop hunting definitely happens with unregulated brokers from time to time.

I’ve participated in some stop hunting on occasion. :smirk::shushing_face:

Stop hunting ? :wink:
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