Who actually gets my losses

when i have a trade and get stopped out …who gets my losses.

my broker actually closes my deal when i get stopped out…
and i make a loss…but the money still exists…
who gets. it can someone please explain where it is exactly.

Your broker.

/
is it? or is the the person on the other side of the trade?

Your broker, unless you have enough money for an ECN account,
which if you are on here asking a question is very unlikely.

Stop this mislead statement. If you don’t know the answer, don’t answer.

Too many misinformation in this forum, unfortunately a lot of novice trader here. I’ll get out of here.

LOL

That is not misinformation, nor is it misleading. It’s the truth for most retail brokers.

If you don’t know that, you’re likely a novice trader yourself.

Bye and keep wonder that: “No, no, I’m a great trader but my broker keep on hunting my stoploss. I’ll move to another broker”

sorry typo typo

i think i found the answer…
if i went long in the euro usd…and did a buy at 1.50000 my broker would either match me to others on his system who are willing to sell at that price…or would contact the large internetwork system to match my price with someone who wants to sell at that price. …the prices i get on my screen are the prices my broker can offer.
then the price drops to 1.4 …now i have not really lost money per say…what it means is i paid 1.5 for my euro usd and they are only now worth 1.4 …so when i sell em or if i am forced to sell em…
the person who buys them …be it someone my broker has matched me to on his internal system or be it someone on the main internetwork…they just pick em up cheaper…as the market is cheaper relative to when i bought in the first place…
and they only make money if the market moves up…

so in reality …the person who buys from me when i sell…doesent actually get my losses…they are just in a better buying position if the price moves up …than i would have been.

so its the person on the other end of the trade…

some will say this is the broker…as most brokers know that most novice traders make endless mistakes…and so they dont really put their deals in the market …they keep em internally …
but academically its the person on the other end of my trade who gets my losses…but that is only relative to my original position…so really luiz is correct…but for a newbie trader …daydreamer is also correct…
but this answer is the most correct.

hence …me being in the market in the first place has only really added liquidity to the market …and there are plenty of people like me…and the big players want liquidity …as this means there are more and more people speculating cash on the market and …the more that speculate the more price moves…around and the big players can then manipulate greater market moves and get the masses running round speculating and driving the market their way…and then the big speculators dump their loads and end up in a better position on tuesday relative to the market …than they were in on monday relative to the market…ie they just made a ton of cash effectively…but in reality (relatively)

Where did luiz say anything that was “correct”?

All he did was assume INCORRECTLY that Daydreamer was wrong, and say there was misinformation. Which there wasn’t.

As for your thoughts on where your losses go, they go to where your wins come from.

It’s a messy market. Nobody will ever be there exactly on the other side of your trade, at exactly your price, with exactly your lot size. The broker does that for you. They take your trade, open, or close, buy or sell.

When you open a trade, you open with your broker as counterparty. Your broker will pass that trade off as soon as they can. It will be bundled with other ones, and ride along until you decide to exit.

When you exit at a loss, the money you lost doesn’t have to go to anyone right then.

And furthermore, your exit from the market is actually a new trade opened. You might be selling at a loss, but the broker has a match that someone bought at that point, therefore technically keeping your trade alive.

The wins and losses float in a large pool of open contracts that ebb and flow as trades are entered, and exited. The trader that pulls out of the market with a winner, will detract from that pool, and the trader that exits as a loser, adds to it.

There’s not ever going to be one single person that makes money from you when you lose.

Kinda shoots down the “stop run” theory now doesn’t it?

So your not an advocate of the ‘stop run theory’ then MT? Of course you well know of the retail weight v interbank. So I’m bound to ask why? :smiley: How many times have we seen the trade mark spike high/ low and then the reverse of PA? Admittedly on 4h and up. Interbank does have deep pockets! :smiley:

Lets just make this conversation easy to understand and give a simple answer (sorry did not read it all didnt care to)

To the OP for the sake of argument whenever you take a loss just assume I took your money lol. Especially if you trade the AU :wink:

Nope, not a fan. The theory doesn’t hold water over the long haul. DNT options, yeah, I get it. But not a stop run in the purest sense of the idea. And forget the bucket shop spikes. That happened in the past, but tighter regulation of brokerages have seemed to stem that tide.

Here’s a few of questions for you.

If it’s conventional wisdom that stops will be run, why would those that know it will happen, still put their stops in the same sort of places?
Since retail traders don’t register on the interbank radar, it’s not us doing it.

Why would commercial banks do it?

And not just do it once, but day after day?

personally i believe its the big institutions that do a run on your stops …not your brokers.
people who put their stops in the way …clearly didnt know or anticipate correctly what was really going on in the market, or if they had anticipated correctly…moved their stops and just tried to squeeze out more profit from the already profitable deal, and got stopped out.

plus the fact that many insitutions have their own agenda and try and catch each other out…

you should come to shepherds bush in london for a few weeks…it will build up your shrewdness and you will be street smart on the way foxes…operate.

probably pretty similar to the large institutions.

Its not really a run on stops but more pending orders in that area is what is being run. Banks need the liquidity to make there moves and where is the best place to do that?

Like eblip said when I am trailing my stop down just above that lower high that formed I do know eventually it will get tagged and I am ok with that. Like stated above I got to squeeze out that little bit more from the market.

However thats just my .02

Lets assume although small relatively… retail is still a sizeable tipbit? The bulk of retail will be trading a tight SL, say 20-30’ish pips. Agreed, institutional can’t see these stops but we all know where the bulk will be… a few pips under the lowest low or a few above the highest high. For the sake of arguement, lets assume it was the lowest low. Institutional might watch these gradual longs building, then when enough have bought, sell off sufficiently to push PA past those SL’s briefly. Then buy at this new lower level safe in the knowledge that they have taken out the bulk of retail (money in the bag) and bought at a cheaper level… a win win. All flavours of institutional you could argue would be aware of this tactic and so if they did start buying at this level their stop would be considerably larger in antissipation of the ‘trade mark’ lower dip characterised on charts as a candle with a long wick. Many pro traders look for this candle as a confirmation signal to enter. In addition, institutional will gradually feed into a position as they have to off load big numbers and this cannot be done in a single trade for fear of tipping their hand aka level II & III platforms so the first few orders can bare a deeper SL.

Having said that MT… its not a concern for me as I don’t try to pick tops and bottoms. :smiley:

or imagine a large institution has 5 billion dollars from microsoft to convert to yen ( to buy yen )…and microsoft like the current price…offered to effectively (SELL 5 billion worth of usd /JPY )
they take their order to an institution that agrees a price to get for microsoft.
if they SELL the 5 billion on the market in one go it will move the price DOWN on the usd jpy…which effectively means jpy is more expensive…and they will not get filled anywhere near the price they want and will take a loss.

so instead what they do is they BUY a billion USD/JPY…this drives the price UP…

the move is noticed by thousands of retail sellers…who jump on the band wagon and start to BUY USDJPY…and place appropriate stops.

the retailers BUYING USD /JPY…force the price to RISE even more considerably…without the institution doing any more BUYING.

now as PRICE RISES to a decent level (and from they experience of the institutional investors…who realise now there is enough liquidity in the market to get their order filled at a decent price )…the institution can now SELL 5 BILLION USD/JPY…

as they do this the price DROPS rapidly… and the order is filled at a higher price than when they started this set up.
but now the retailers are all in a spin and some start panicing and close their buy orders …which effectively become more SELL ORDERS of usd /jpy and this just adds to the momentum…which eventually wipes out all the retailers stops of the other investors still in the game…
but in wiping out the stopsof the retailer who were buying…what is actually happening is their trades go from BUY USD/JPY TO SELL USD/JPY…
this forces the price of the usd jpy even lower hence a big price spike.

once this happens …the institutional investors then have already made a heap of cash…
and now they know the price is even lower due to their own actions…and they can now step back into the market and buy usd jpy at a low…knowing very well that it will rise to the level it was at earlier before the set up…

and then the investors get a nice hefty bonus…

Trader’s stoploss is where the pending order of large institution placed. Both order being hit, provides liquidity to the market and noob always say " Damnn, dis broker sux, they hunt my SL again"

Ouch!

p/s: You broker simply don’t have enough money to run stoploss; it’s the shark, those you chose to play with, do it.

I’m in the same boat. Trying to call tops is one thing, but trying to pick a bottom makes your fingers smelly :smiley:

And I hear you about the basic idea of the way stop runs are supposed to work. But the problem I see, and can’t see past (from a retail perspective anyway), is that most retail traders don’t show up on ANY institutional radar. Take Oanda for instance. Huge broker, but pure market maker. And those trades won’t register anywhere, nor have the ability to move price in any fashion.

With that being said, most traders have the idea in their heads that forex is some kind of investment, and price moves based on speculation alone.

I don’t find that as a truth. Money moves for different reasons, probably the least of which is purely speculatory in nature. Spot forex is nothing BUT speculation. But I’m not buying ANY euros when I buy EU. My dollars never even leave US denomination. So how can that make any difference as far as cleaning out stops?

Futures and forwards however, are DEFINITE market movers, and actual purchases. Whether they take delivery is a different story though. And there are definitely speculators in those markets. But I’ve seen far too many market moves that go completely counter to what the current fundamentals would show. We don’t see the what requests large clients have for institutions needing actual cash conversions. Those and interests represented by the IMF, CBs, and BIS by far outweigh anything pro traders can generate. We traders are just trying to hitch a ride.

Unless of course, your last name is Soros…

That’s right.
All retail trades are warehoused, which means each broker matches up a long with a short via its internal order book.
When they need to net off their risk they simply lay it via their price suppliers in the interbank.

Retail stop losses are of no interest to the generic market whatsoever. The reason being all that business is cleared internally at the individual brokers simply by netting one order off against another if of course, a deal is available (& the broker decided to deal) at the specific price.

That includes so called stops, which are nothing more than an opposite order resting at a specific level on the brokers order book. Their clients are simply betting against each other facilitated by the (middleman) broker.