How easy is it for a broker to stop hunt

VielGeld said:
Is any broker safe knowing this?

Best to go by reputation, I guess...
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They can't do that if you are trading something through an exchange. Forex or spreadbetting you're wide open to this type of abuse. Remember more than one big player has been caught abusing slippage lately.
 
So I guess you really can't trust any of them. I really want to leave spread betting but being able to trade small sizes is the reason I use it.
 
If this happened so much as to cause a real problem there would various
discrepancies between brokers charts all over the place, the spikes would
need to stay in place for the broker to refer the client back too. I seem
to remember a thread on T2W that tried to do that and failed. Does anybody
have any examples?
 
brewski1984 said:
So I guess you really can't trust any of them. I really want to leave spread betting but being able to trade small sizes is the reason I use it.
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You can't trust any of them but staying away from forex and spreadbetting is a good start, unless of course your broker 'borrows' your money from your segregated account and blows it, but that's another subject entirely.
 
dazzer_fx said:
If this happened so much as to cause a real problem there would various
discrepancies between brokers charts all over the place, the spikes would
need to stay in place for the broker to refer the client back too. I seem
to remember a thread on T2W that tried to do that and failed. Does anybody
have any examples?
Click to expand...

So why would that functionality be built into the software? Different brokers charts do differ, the excuse being their have different liquidity providers.
 
pboyles said:
So why would that functionality be built into the software? Different brokers charts do differ, the excuse being their have different liquidity providers.
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I use Tradestation Securites and IG index, which are like chalk and cheese, in
the last 12 months and plenty of screen time I haven't seen anything that I
would call untoward. I had a problem with FXCM (bad tick) and it was sorted
within hours http://www.trade2win.com/boards/forex-brokers/88834-fxcm-discussion-25.html#post1426442. As I said I'd like to see some examples.
 
surely if any broker is proven of this ,we are emtitled to all our loses back as they have broke t and cs. Id love CMC to be found quilty, much of my early funds paid for steal4frees xmas party
 
Although stop hunting is certainly despicable of any broker or bank to do that and several brokers have been caught, I think you guys are blowing it out of proportion a bit. Let's put some perspective here. The video is for example only and shows and individual trade being manipulated. Brokers and banks do NOT hunt individual trades or traders unless you are trading mega size. Stop hunting your $1/pip trade isn't worth their time of day. Instead they DO hunt clusters of stops where the monetary value is very significant. If you place your stop where everyone else is placing it or where the broker's tell you to place your stop (read that again) then you WILL get stopped out more often than should be expected. Before anyone jumps on me I'm not defending any brokers. I agree many of them are shady at best. But if you want to play the game you have to know and understand how it works so you can plan your strategy accordingly.

Peter
 
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On a related note, most of the stop hunting for clusters comes from the banks and liquidity providers who know where the money is sitting since they can see more than retail trades or even the brokers can. Of course the price(s) they quite are reflected via your broker who then looks like the bad guy. However the Virtual Dealer plugin is almost exclusively broker operated and not used by banks.

When you see false breakouts, especially at the open of the Asian session, that's the banks looking to wash out traders with weak positions. They know where the money is at and they have the means to get it.

Peter
 
wackypete2 said:
Although this is certainly despicable of them to do that and several brokers have been caught, I think you guys are blowing it out of proportion a bit. Let's put some perspective here. The video is for example only and shows and individual trade being manipulated. Brokers and banks do NOT hunt individual trades or traders unless you are trading mega size. Stop hunting your $1/pip trade isn't worth their time of day. Instead they DO hunt clusters of stops where the monetary value is very significant. If you place your stop where everyone else is placing it or where the broker's tell you to place your stop (read that again) then you WILL get stopped out more often than should be expected. Before anyone jumps on me I'm not defending any brokers. I agree many of them are shady at best. But if you want to play the game you have to know and understand how it works so you can plan your strategy accordingly.

Peter
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It would be interesting to see a breakdown of Gain Capital or FXCMs trades where they were applying asymmetrical slippage. I doubt they were only targeting massive trades, surely with an automated system you can take a bit from everyone.

When I read about people being refunded after the NFA judgement the impression I got was that plenty of small traders were affected.
 
pboyles said:
It would be interesting to see a breakdown of Gain Capital or FXCMs trades where they were applying asymmetrical slippage. I doubt they were only targeting massive trades, surely with an automated system you can take a bit from everyone.

When I read about people being refunded after the NFA judgement the impression I got was that plenty of small traders were affected.
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No argument with you on that, but slippage and stop hunting are different beasts. My post deals mainly with stop hunting.

I edited my original post in case I wasn't clear on that.

Peter
 
wackypete2 said:
No argument with you on that, but slippage and stop hunting are different beasts. My post deals mainly with stop hunting.

Peter
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Yes I was just about to clarify that myself. Clearly designer slippage can be built in with very little effort. Stop hunting whilst technically feasible (as the video shows) presumably could only be applied on an individual basis, though clearly the functionality exists in the software so someone must be using it.
 
Here's the manual for the virtual dealer plugin, you can see the settings for maximum positive and negative slippage etc.
 

Attachments

  • metatrader virtual dealer plugin.pdf
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wackypete2 said:
On a related note, most of the stop hunting for clusters comes from the banks and liquidity providers who know where the money is sitting since they can see more than retail trades or even the brokers can. Of course the price(s) they quite are reflected via your broker who then looks like the bad guy. However the Virtual Dealer plugin is almost exclusively broker operated and not used by banks.

When you see false breakouts, especially at the open of the Asian session, that's the banks looking to wash out traders with weak positions. They know where the money is at and they have the means to get it.

Peter
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Pete. I like what you write, and would like to subscribe to your newsletter. Where can I sign up?
 
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