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Phew - took a while to get to the end of this particular bunfight.
I'd be interested to know how many people actually have more than one online price source when they trade (not a tradeable source, just a second independant price feed to enable them to spot these alleged mishits).
The reason I'm wondering about this is that I am assuming most of the people subscribing nto this site are trading with basically the same ideas (give or take a bit) as many of the larger (especially model based) customers of the banks.
As information becomes more readily available to every customer, from small margin accounts through corporates to the large CTA's, there is, in my opinion a tendancy for the stops to be placed in fairly predictable spots.
Thus, if a small private individual has put his stop just through, say a 200 day moving average, theres a decent chance that he/she wont be alone. And with the 'conventional' interbank market (i.e. EBS / Reuters and the few remaining voice brokers) getting thinner and thinner in the last couple of years, many bank traders are finding that if they dont ram the market through their own stops, buying / selling ahead for the majority of the amount) then someone else's flow will inevitably do it for them. In the first scenario the trader breaks even or makes money, in the second they probably wear a loss. What would YOU do? :-)
I have seen it in the interbank market time and time again (USD/CAD is one of the worst culprits) and while the trade boxes have a slightly different dynamic, I'm sure this thinness impacts on them.
If you have an independant feed, look and see next time your stop gets triggered what the price action is on both feeds. If you still don't like the you're treated change accounts.
As to the debate about scalping vs longER timeframe trading I have to say that I have at times used both. The average spot FXv trader at a bank will not for example buy USD/JPY at a given level and say 'that's it, its not going a bean lower'. They will maybe buy a few bucks worth, wait till it gets to a small resistance level, sell maybe half ths position out, wait till it retraces a bit, buy some back etc. Hopefully in the end you end up with a position you're happy with at an average thats below your stop level.
And I'm not too proud to try and grab a few pips here and there without any firm view on a curency if it's there to be grabbed.
We're all here to make money right?
Happy trading.
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