Best Thread Other Side of the Screen

[tar]

This presumes that most retail traders place stop loss orders in the market. Is there any real evidence that this is what happens or are markets just moved to places where retail traders are likely to decide to exit ?

Liquidating "Margin call" levels ...

 

[peakoil]

This presumes that most retail traders place stop loss orders in the market. Is there any real evidence that this is what happens or are markets just moved to places where retail traders are likely to decide to exit ?

Here is a quote, which, I trust, some of you will possibly find interesting, from Silvani's acclaimed "Beat The Forex Dealer", where he is not exactly alluding to spread betting but moreover to the retail FX market:

"Does stop hunting really take place?

Of course it does! Dealers are as much information pedlars as they are price quoters... Stop hunting takes place all day, every day, and there are some prop desks that actually specialize in hunting for stops for short term gains. Sometimes no communication is needed, since dealers know that Joe Trader places his stops at obvious levels that they become perfect targets.

It's amusing to see that most brokers actively preach to their clients the value of placing tight stops as a way to control risk, but in reality they are just looking for stop levels to shoot for. Tight stops more often hurt the trader than they help him, since the intra day FX market is filled with random moves (noise) that routinely wipe out the retail crowd's 10 pip stops."

 

[malaguti]

Here is a quote, which, I trust, some of you will possibly find interesting, from Silvani's acclaimed "Beat The Forex Dealer", where he is not exactly alluding to spread betting but moreover to the retail FX market:

"Does stop hunting really take place?

Of course it does! Dealers are as much information pedlars as they are price quoters... Stop hunting takes place all day, every day, and there are some prop desks that actually specialize in hunting for stops for short term gains. Sometimes no communication is needed, since dealers know that Joe Trader places his stops at obvious levels that they become perfect targets.

It's amusing to see that most brokers actively preach to their clients the value of placing tight stops as a way to control risk, but in reality they are just looking for stop levels to shoot for. Tight stops more often hurt the trader than they help him, since the intra day FX market is filled with random moves (noise) that routinely wipe out the retail crowd's 10 pip stops."

so basically, nobody believes the guy who started the thread. So much for how things are done the other side of the screen

 

[mike.]

If that were true, would there not be just as many tp/ limit orders at those obvious levels ?

 

[peakoil]

@ malaguti, I do believe that reputable sb companies aren't the ones stop hunting - however, as the quote I've given suggests, that's not to say its rare in the wider market - from which they derive their prices.

Most retail will, however, point their blame towards the SB co for apparent stop hunting, not realising what's really going on...

 

[malaguti]

@ malaguti, I do believe that reputable sb companies aren't the ones stop hunting - however, as the quote I've given suggests, that's not to say its rare in the wider market - from which they derive their prices.

Most retail will, however, point their blame towards the SB co for apparent stop hunting, not realising what's really going on...

That's clear for me, cheers peak oil and just to be clear I'm firmly in the retail pack. I don't believe a bloody word they say!

 

[peakoil]

BTW, if anyone is interested in what you can do to protect yourself against stop hunting if you are spread betting fx - Silvani advises - be very cautious using, or leaving tight stops, in obvious places, at times of illiquidity.

 

[mike.]

Just realised i have this book," beat the forex dealer " Is it a worthwhile read peakoil ?

 

[peakoil]

@mike I read it first when it came out, and what I can say is I liked it v much then. I've recommended it to a friend, and the feedback I've received has been positive. Maybe you should dust it down and give it another go. I would think it still has much to offer to anyone taking on the markets nowadays - particularly FX (which, LOL, isn't my thing but still...)

I referred to it now because, just thinking about this thread, I remembered he had plenty to say about stop hunting and indeed certain other shady practises.

 

[mike.]

Cheers, will dive into it tonight and report back..

 

[peakoil]

@ mike - cheers, would be interested in your thoughts on it.

 

[Splitlink]

@ malaguti, I do believe that reputable sb companies aren't the ones stop hunting - however, as the quote I've given suggests, that's not to say its rare in the wider market - from which they derive their prices.

Most retail will, however, point their blame towards the SB co for apparent stop hunting, not realising what's really going on...

For what it's worth I entered a long trade on FT at 0950 and it struggled for most of the morning. The spike, when it came at 1120, took me completely by surprise but, although my platform was minimised, by the time I got it up and closed the trade manually I still managed to close at 6541.5. I was pleased with that and believe that my fill was quick. T guess a lot of stops got triggered but some of us take profits at that level and there are selling orders, too. It is not all about seeking out the stop loss levels.

 

[Splitlink]

Here is a quote, which, I trust, some of you will possibly find interesting, from Silvani's acclaimed "Beat The Forex Dealer", where he is not exactly alluding to spread betting but moreover to the retail FX market:

"Does stop hunting really take place?

Of course it does! Dealers are as much information pedlars as they are price quoters... Stop hunting takes place all day, every day, and there are some prop desks that actually specialize in hunting for stops for short term gains. Sometimes no communication is needed, since dealers know that Joe Trader places his stops at obvious levels that they become perfect targets.

It's amusing to see that most brokers actively preach to their clients the value of placing tight stops as a way to control risk, but in reality they are just looking for stop levels to shoot for. Tight stops more often hurt the trader than they help him, since the intra day FX market is filled with random moves (noise) that routinely wipe out the retail crowd's 10 pip stops."

When I get an urge to say " "*** it, I'm going to put my stop 40 points away and go shopping" I get stopped too often for comfort! Stop loss levels will, always, be a major debating subject for traders.

 

[tar]

Interestingly some of them are having hard time making money : CMC , City Index

http://www.cmcmarketsplc.com/group-results.html

http://forexmagnates.com/city-index-reports-loss-for-fy-2013-on-falling-volumes/

 

[wackypete2]

BTW, if anyone is interested in what you can do to protect yourself against stop hunting if you are spread betting fx - Silvani advises - be very cautious using, or leaving tight stops, in obvious places, at times of illiquidity.

Place your entry order where everyone else is pacing their stop loss orders. Just look at a chart. Every other retail trader is seeing the same "obvious" trade scenario you are and placing their entry and stop at the same place. Don't fall into that trap.

Peter

 

[peakoil]

@wackypete - hmmm... yes... don't place your stops in obvious places especially during quiet (illiquid times) - that's just what I quoted.

 

[sonofcablemonster]

Place your entry order where everyone else is pacing their stop loss orders. Just look at a chart. Every other retail trader is seeing the same "obvious" trade scenario you are and placing their entry and stop at the same place. Don't fall into that trap.

Peter

Aha. If only it were that simple. When stops are hit amateur hour is over and a new game begins. In this new game the players are more savvy. It's like the game within the game within the game. Every print after the stops are gone is critical. Breakout buyers be aware of the slam down.

Patterns don't repeat but behaviour does.

 

[peakoil]

Interestingly some of them are having hard time making money : CMC , City Index

http://www.cmcmarketsplc.com/group-results.html

http://forexmagnates.com/city-index-reports-loss-for-fy-2013-on-falling-volumes/

While that is interesting. I wouldn't be so sure that those results are as much indicative of wider malaise in the sb industry, rather that both firms are, IMO, more likely losing ground to (dare I suggest it...) better competitors. Or at least do you not think that there's a possibility that that's what's been going on?

 

[wackypete2]

Aha. If only it were that simple. When stops are hit amateur hour is over and a new game begins. In this new game the players are more savvy. It's like the game within the game within the game. Every print after the stops are gone is critical. Breakout buyers be aware of the slam down.

Patterns don't repeat but behaviour does.

It's very simple, son. Stop trading the smalls. Get yer nut in the game. Ya gotta be match hardened.

 

[tar]

Aha. If only it were that simple. When stops are hit amateur hour is over and a new game begins. In this new game the players are more savvy. It's like the game within the game within the game. Every print after the stops are gone is critical. Breakout buyers be aware of the slam down.

Patterns don't repeat but behaviour does.

This movie explains your quote very well , enjoy :

http://www.imdb.com/title/tt0482571/?ref_=nv_sr_1