Stop Hunting

[AidyMac]

Hi guys this is my first post here on the forum.

I have been paper trading forex for about 9 mths now and have been hemoraging up until quite recently.

However I have a system that is beginning to bear fruit.

I am using a 5 and 20 ema along with a MACD and applying it on a four hour chart.
I enter on the cross of the ema bullish or bearish with the MACD on defuault setting on MT4, giving confirming signals and enter accordingly. My stops are at the nearest line of support or resistance.

I move my stop to break even on a 1-1 risk reward basis and ride profits out as best I can again using support/resistance as the trade progresses whilst still giving the market room to breath. As you might imagine this would lead to me holding a positon for a week or two.

But my question is this.
I have heard so many stories of brokers manipulating price movement to activate retail traders stops and was wondering would such a strategy be a candidate for said mal-practices due to its simplicity. Are there any brokers out there that can be relied on, prefreably well regulated, in the U.K that I can start with a margin of £500 when I go live.

In additon, If I were to hold a position over a weekend are their any other charges that a broker might have, if so what are they and what kind of costs could I expect to incur.

I welcome your comments and look forward to hearing from you all.

Many Thanks

Aidy Mac

 

[gedward3]

Hi guys this is my first post here on the forum.

I have been paper trading forex for about 9 mths now and have been hemoraging up until quite recently.

However I have a system that is beginning to bear fruit.

I am using a 5 and 20 ema along with a MACD and applying it on a four hour chart.
I enter on the cross of the ema bullish or bearish with the MACD on defuault setting on MT4, giving confirming signals and enter accordingly. My stops are at the nearest line of support or resistance.

I move my stop to break even on a 1-1 risk reward basis and ride profits out as best I can again using support/resistance as the trade progresses whilst still giving the market room to breath. As you might imagine this would lead to me holding a positon for a week or two.

But my question is this.
I have heard so many stories of brokers manipulating price movement to activate retail traders stops and was wondering would such a strategy be a candidate for said mal-practices due to its simplicity. Are there any brokers out there that can be relied on, prefreably well regulated, in the U.K that I can start with a margin of £500 when I go live.

In additon, If I were to hold a position over a weekend are their any other charges that a broker might have, if so what are they and what kind of costs could I expect to incur.

I welcome your comments and look forward to hearing from you all.

Many Thanks

Aidy Mac

Hi Aidy,

I think ETX Capital and IG Index let you trade at 50p a point to make
your £500 go a little further.
Just make sure you choose the rolling contract so they dont stop
you out each evening, you could also pay the extra spread and use the
futures contract. You seem to know how your system is playing out so
the best of luck.Have a look here at some of the systems and see if
you can find anything that may help yours or mistakes that other's
have made with similar systems

http://www.forexfactory.com/forumdisplay.php?f=71


Ged

 

[AidyMac]

Many thanks for your kind comments and encouragment gedward 3. I'll look into that.

Any other takers for sharing their insight?

 

[arabianights]

Stop hunting, of course, goes on and is a perfectly legitimate market practice.

But as for retail brokers manipulating major FX pairs to take out some £10pp stop... you're having a giraffe

 

[AidyMac]

Thats a fair comment arabiannights. I was ignorant to that fact.
What I was getting at was because the drawdown was big enough, would a broker stop hunt that far?

And do excuse my ignorance in asking some of the more rudimentary questions that you traders treat as an every day fact of life.

I just want to properly prepared when i do go live.

 

[arabianights]

lol no need to apologise mate, if I'm coming off gruff it's due to the vagaries of internet communication

 

[AidyMac]

With regard to being stop hunted arabian nights. Its Just part of the game is it?

 

[arabianights]

stop hunting is really part of price discovery, when you think about it

 

[montmorencyt2w]

Aidymac,

IG Index have been mentioned, and I think they are an excellent place for a beginner to start. I chose them quite by chance, but I was and am glad I did.

Chances are they would start you off on a limited-risk account, which means that guaranteed stops are compulsory and you pay a premium in extra spread for this.
The direct benefit is that the deposit is easy to work out and is less than if the stops were not guaranteed. Minimum stop distances are wider, so it's hard to trade using minimum stops techniques, but you just have to learn to live with this.

You can also opt for their beginners' programme which allows you to trade for 10p a point for a few weeks. It goes up gradually. Can't remember the exact details.
(Someone on here has reported that they got IG to extend this indefinitely for him, but I have no experience of this myself. Can't imagine they'd like everyone to be doing this).

They seem to be one of the more responsible SB firms, although I am sure they have their problems. They don't have the tightest spreads, even without guaranteed stops, but for a beginner, it's probably a price worth paying.

When your trading skin is a bit thicker, you can try out the other firms, but all in good time. IG's platform is one of the best I have tried.

 

[AidyMac]

Thanks for that Mike. Your advice certainly seems sound. I would be less concerned about spread costs as my strategy is involving the 4hr chart, and involves holding a position for a week or two.

Having a stop that wil be honoured is absolute must though, As I dont see the point in putting a trade on realising how much you are risking only to find your stop has come and gone but your position has not been closed.

 

[FSBS]

Stop hunting, of course, goes on and is a perfectly legitimate market practice.

But as for retail brokers manipulating major FX pairs to take out some £10pp stop... you're having a giraffe

Been through this a million times. They don't need to manipulate the markets just their platform/data feeds/whatever

Spikes on retail charts prove that this shouldn't be to hard to do.

Deffo goes on if they stand to make enough imo but just have to get on with it if you want to trade retail eh.

 

[Black Swan]

Hi guys this is my first post here on the forum.

I have been paper trading forex for about 9 mths now and have been hemoraging up until quite recently.

However I have a system that is beginning to bear fruit.

I am using a 5 and 20 ema along with a MACD and applying it on a four hour chart.
I enter on the cross of the ema bullish or bearish with the MACD on defuault setting on MT4, giving confirming signals and enter accordingly. My stops are at the nearest line of support or resistance.

I move my stop to break even on a 1-1 risk reward basis and ride profits out as best I can again using support/resistance as the trade progresses whilst still giving the market room to breath. As you might imagine this would lead to me holding a positon for a week or two.

But my question is this.
I have heard so many stories of brokers manipulating price movement to activate retail traders stops and was wondering would such a strategy be a candidate for said mal-practices due to its simplicity. Are there any brokers out there that can be relied on, prefreably well regulated, in the U.K that I can start with a margin of £500 when I go live.

In additon, If I were to hold a position over a weekend are their any other charges that a broker might have, if so what are they and what kind of costs could I expect to incur.

I welcome your comments and look forward to hearing from you all.

Many Thanks

Aidy Mac

Yep it's a simple enough strat. so good luck with that. Just be careful with the x-overs, on backtest it looks great; it's rigid, it's been done, the x-overs are now confirmed history... However, in live trading situations making that call is quite different..."has it, hasn't it, damn it's just reversed and taken out my stop, I'm sure that histogram went green, now half an hour later it's still red, did the fookers go back in with their red pen? How come that never happened on backtest?" With regards to brokers, as opposed to SB firms, you won't go wrong with FXpro, Alpari and FXCM (with whom you can also SB)...

 

[AidyMac]

I do try to wait for a retracement on this strategy, in addition look at what pattern the candle sticks are from in.

I suppose I could use fibbo levels for this but I find this far too speculative for my level of experience. I'll try and post some screen shots of the trades I am running at the moment and that might help my trading along hopefully.

 

[Black Swan]

I do try to wait for a retracement on this strategy, in addition look at what pattern the candle sticks are from in.

I suppose I could use fibbo levels for this but I find this far too speculative for my level of experience. I'll try and post some screen shots of the trades I am running at the moment and that might help my trading along hopefully.

Aidy don't let me put you off, honestly there's enough guys on 'ere that'll do a far better job of it than me... X-overs are ba5tards at looking right post event, but that's not to say the don't work, in as much as perhaps 70% of the time getting you in on the right side of the swing.

Nice idea, why not throw up a few screenshots. IMHO you appear to be going about things the right way, which is why you've attracted so many helpful comments thus far.

 

[AidyMac]

Thank you for your kind comments Black Swan.
I shall put a screen shot up and see if I can glean any further knowledge from anyone else that cares to offer an insight.

 

[montmorencyt2w]

I have my doubts about support and resistance (expressed elsewhere on occasions), but whatever else they do, they and MAs do help do give your chart a bit of "structure".

Have a look back on weekly and monthly charts and be aware of the major turning points and draw them in as "levels" (not too many).

Get an idea of trading ranges.

Think of them (if you like) as pencil sketches. They can be rubbed out, but useful as a rough guide. Depends to what extent you think visually, I guess. Some do more than others.


See if price seems to react to your levels.
There's loads more on T2W on this sort of thing if you look around.
Look around, but also see what you can discover by your own observation.
In the long run using a method you have developed yourself will probably be
more productive than trying to use someone else's.

 

[AidyMac]

Hi guys, again thanks for the helpful input. I am taking all your advice onboard.

This question is very basic. How do I get screen shots up on a post?

 

[Tenapenny]

Hi guys, again thanks for the helpful input. I am taking all your advice onboard.

This question is very basic. How do I get screen shots up on a post?

When you post, take the "Go Advanced" option, scroll down to "Additional Options" then "Attach Files". After you click "Manage Attachments" you will be able to browse for your screenshots then upload them. Hope this helps.

 

[gedward3]

When you post, take the "Go Advanced" option, scroll down to "Additional Options" then "Attach Files". After you click "Manage Attachments" you will be able to browse for your screenshots then upload them. Hope this helps.

Dont forget to press 'Print Screen' on the keyboard and then open 'All Programs' - 'Accessories' - 'Paint' and Press 'Edit' then 'Paste' and save the file to a folder.


You can then add any notes on there.

Apologies if you already know this or it has already been mentioned.

Ged

 

[AidyMac]

Okay I think I have the picutre up-loaded now.

I apologise in advance for the messy picture Im still not quite there in working with the terminal yet.

Let me know what you think of the entry point and how this trade on the USD/CHF pair.

And thanks again for your help guys.