Stop hunting

[paperboy]

The ultimate trading method? Nothing moves the market better than stops. But the trick is to know where there are enough stops to create a move in one direction and for how long they will work, right? How do we do that? Patterns, volume, time, cot reports...?

 

[NihabaAshi]

Quote from paperboy:

The ultimate trading method? Nothing moves the market better than stops. But the trick is to know where there are enough stops to create a move in one direction and for how long they will work, right? How do we do that? Patterns, volume, time, cot reports...?

Key market events moves the markets.

Mark

 

[paperboy]

Quote from NihabaAshi:

Key market events moves the markets.

Mark

That to but mostly stops, no? An event can be interpreted both as buy and sell and new positions does not move so much as fear of losing. If i understand it

 

[Spectre2007]

stops are just the market participants idea of where risk lies, the aggregate market places stops at points to signify possible sentiment change if price traverses to that point. So most times, the stops distance is too small from entry point, and just based on daily volatility or ATR will likely get hit.

One can afford to place small stops at only outliers like the daily high or low, or weekly high or low, or monthly high or low.

Take the average intraday wave size and extrapolate from the S/R zone where the stop should be, by placing it a few ticks greater then the average wave size during the day.

 

[NihabaAshi]

Quote from paperboy:

That to but mostly stops, no? An event can be interpreted both as buy and sell and new positions does not move so much as fear of losing. If i understand it

No it does not have to do mostly with stops.

Thus, price movements in the market is not mostly related to stops being hit.

Mark

 

[Joab]

Quote from paperboy:

The ultimate trading method? Nothing moves the market better than stops. But the trick is to know where there are enough stops to create a move in one direction and for how long they will work, right? How do we do that? Patterns, volume, time, cot reports...?

Hence you have found the power behind simple support and resistance "areas".

 

[paperboy]

Quote from NihabaAshi:

No it does not have to do mostly with stops.

Thus, price movements in the market is not mostly related to stops being hit.

Mark

But then you are saying that new positions move price more?

 

[alex.samant]

my dear paperboy,

let go of this stop thing. it's not leading anywhere. when you come up with a sound strategy based on stop running let us know and you'll have our ever grateful respect

unless you are a market maker or a pit trader, i doubt you will come up with one that WORKS in real life.

 

[Spectre2007]

feedback loops in regards to price action.

 

[paperboy]

Quote from alex.samant:

my dear paperboy,

let go of this stop thing. it's not leading anywhere. when you come up with a sound strategy based on stop running let us know and you'll have our ever grateful respect

unless you are a market maker or a pit trader, i doubt you will come up with one that WORKS in real life.

Ok.. What is stop running?