Let's give "stop hunting" a rest

[Chris Hood]

I agree with the points above about losses and problems self-created by close-in stops. And I did not have a problem with stop-hunting at Saxo Bank. My stop loss orders were always filled instantly with little or no slippage. Of course, in every one of those instances, Saxo, as the counterparty, made money. It had no reason to dishonor the orders.

The manipulation I encountered was different, worse, and far more costly: Saxo refused to fill orders profitable to me. It refused to honor the prices streamed to the Saxo Trader (the customer platform) in currency pairs in which I had pending limit orders. We lost not only what we should have made in those trades, but also the profits we would have made in other positions still open when we decided to close the account due to the order theft.

Bottom line: I post my first-hand knowledge of Saxo's practices so traders like ash71 can benefit from it. As he says, "Chris, I read your earlier post on Saxo and found it very helpful when I was looking for a new broker, toying with the idea that 'Banks' were a true anonymous trading environment."

[tim_nn]

Guys, you are discussing two different things in the same thread, here.

Chris, you are absolutely right to make your experiences with Saxo as public as you possibly can, and as often as you possibly can. The more that people become aware of what they're like, here and from other internet forums, the more people will be "saved" from losing their accounts. You are clearly one of a VERY large number of people all of whom have had very similar experiences at the hands of these not-effectively-regulated "people". And the more people who know that, the better.

It's ironic that in the UK, the spread-betting firms have in some quarters totally unjustifiably inherited the mantle of being perceived as the successors to the bucket-shops of Livermore's days, whereas the reality is of course that some of the "retail forex brokers", including some who have the word "Bank" in their names, fit that bill perfectly, whereas the spread-betting firms are actually honest and well regulated!

However, none of this has anything at all to do with the myths of stop-hunting!

[el cid]

Hi Folks

There are 'bucket shop ' brokers who hunt for stops all the time.Even the large brokers reach out within a few pips to hunt for stops.The definition of few pips varies from broker to broker.Spikes and ball games are the most popular stop hunting methods.

Brokers who employ bonus based dealers have more stop hunting than brokers who do not employ dealers.These dealers have one motive .....profit at any price........including screwing their customers.These dealers have an incentive to hunt for stop losses...ie the higher bonuses.

Think how the large FX companies can afford to pay out fees to intoducing brokers .They have to make a profit somewhere.

When brokers hunt for stops they play balls with customers.They use spikes in the market and call stop loss hits as legitimate trades and other real orders during the spike as illegitimate.The brokers screwing you decides what is a legitimate trade and what is illegitimate.

During a spike a broker will call stop loss hits as legitimate.During the same spike the broker will call other trades (non stop hunting and not profitable) as illegitimate and caused by data feed problems.

You guys need to research extensively as to how 'and not if' brokers hunt for stop losses.

El cid

[KPcurrency]

Maybe you should shift your focus. Do brokers hunt for stops? Could be yes, could be no. However, what we know for sure is , there are certain situations we as traders can avoid to cut down on the possibility of our stops being hunted.

1. You have all heard this before : Stay away from round numbers. Stops tend to be placed around round numbers and therefore easily hunted.

2. Try to avoid Fibonacci retracement areas. Again another oft used area for stops.

3. Look for markets that are moving on heavy volume. Look for markets where the market is facilitating price through time well. These are the times with the most movement and the times when it is least likely that a broker can hunt for stops. To much outside paper entering the market.

[ash71]

I think most agree that stop hunting happens. I do. The issue in this thread seems to be questioning how much of reported stop hunting is due to broker price manipulation, and how much is due to trader error. I hate to guess, but I am inclined to believe that the balance of complaints tend to refelct poor trading choices more than broker intervention.

The only debate, really, is what does a trader do with this information? How is ti helpful? OK, there is a risk of stop hunting. Forex is unregulated enough so this risk will continue until we all find the broker of perfect credentials.If anyone knows who it is, please post!! As KP Currency said well, and as has been posted many times, there are techniques one can employ to mitigate this practice by brokers, mostly in the form of sound stop/loss placement as it relates to Fib/pivot/S&R awareness. Second, brokerage choice. After that, if the clouds of suspicion are still too low to fly, I don't see any other techniques or methods of protection this knowledge can inspire.

[el cid]

Hi Folks

Traders can learn to use options.The best options to buy are under 4 days left to expiry , and at the money.The less time there is to expiry ,the lower the cost.

The alternative is trade with limited risk ,using a hedged strategy which is not fully hedged.

Many years ago I used to trade Dow Futures .I placed a stop loss/limited risk bet.In the morning I was told the position had been closed overnight,as the broker ran his own book trades (which did not have to correspond 100% with the market),and trades were placed on the brokers bucket shop which wiped my position out.It was a $5,000 night out with robbers.

I have never since used stop losses

El cid