Is it true that stop losses with help market prices move towards it, because it's an order waiting?
- Thread starter FCAPhil
- Start date
how the fuck do floor traders even do this?
Floor traders? 5, 10, 20 years ago.
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Price moves because it has to. Think about it.
Offer is @ 1.01, bid @ 0.99. Last price 1.01
Offer moves to 1.00. Maybe 0.99 bid goes market and buys, or someone else leaps over 0.99 bid and buys or 1.00 offer gets anxious and changes to market which hits 0.99 bid or someone else leaps over 1.00 offer and sells to 0.99 bid.
If this simplified scenario plays out in this way, price either drops to 1.00 or even 0.99
This maybe creates a cascading effect where price drops 0.10, 0.20, a dollar whatever. All because of one sell order. Plays out, both directions, in every market every day. T&S shows all.
+ + +
Price moves because it has to. Think about it.
Offer is @ 1.01, bid @ 0.99. Last price 1.01
Offer moves to 1.00. Maybe 0.99 bid goes market and buys, or someone else leaps over 0.99 bid and buys or 1.00 offer gets anxious and changes to market which hits 0.99 bid or someone else leaps over 1.00 offer and sells to 0.99 bid.
If this simplified scenario plays out in this way, price either drops to 1.00 or even 0.99
This maybe creates a cascading effect where price drops 0.10, 0.20, a dollar whatever. All because of one sell order. Plays out, both directions, in every market every day. T&S shows all.
Not forces but where stops are there tends to be counter orders available for banks to get their orders filled. But not yours or mine. They are after hedge fund money. It just so happens that a lot of retail traders have their stops around the same place and are collateral damage.
It's a common notion that the markets will "gun the stops". I don't know if that's actually true. However if one knows Price TA, one would suspect "where" a gaggle of stops would be and would also be likely targets for "gunning" (if such thing exists). So... what is a trader to do about all that?
I say, don't put you stop "one tic" the other side of chart support/resistance, as you're more likely to be caught up in the noise..but rather put it one or two POINTS (or some number) beyond... so that those who would gun the stops are less likely to catch yours. I understand that a "looser" stop includes a bit more risk... but such considerations are arbitrary and subjective. Nonetheless, you have to cope with it all. Good luck!
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SOME of THAT\ not the guilty part. NOT likely i would explain inverse ETFs[or anything like it] to some one .Certain exceptions apply./ Payday shorts someday on FB + the polar bears\ not in that one as of close.
Good thing for me i never play the lotto[stupid tax on those cant do math\as Dave Ramsey says.]
Market Makers Edge[NasdaQQQ/ related mm] has some good stuff like fraction$ in it /LOL
2000 published date+/. He did spill the beans\ note if a bunch of investors traders.... pile up buy or sell orders over the week end or Sunday\LOL they may get gunned/ hit/LOL True.
[NOT gunned like evil empire Russians get gunned down\ by Ukraine \ it's a figure of speech.]
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Lukeman, great book!%%
SOME of THAT\ not the guilty part. NOT likely i would explain inverse ETFs[or anything like it] to some one .Certain exceptions apply./ Payday shorts someday on FB + the polar bears\ not in that one as of close.
Good thing for me i never play the lotto[stupid tax on those cant do math\as Dave Ramsey says.]
Market Makers Edge[NasdaQQQ/ related mm] has some good stuff like fraction$ in it /LOL
2000 published date+/. He did spill the beans\ note if a bunch of investors traders.... pile up buy or sell orders over the week end or Sunday\LOL they may get gunned/ hit/LOL True.