Who sees your stops

[mikasa]

Quote from Redneck trader:

OP,

Take a look at LVS on Jan15th

Pull up a 5 or 15 minute chart and look at 11:45 candle

RN

as a supposed GREAT trader you are definitely the quiet type

meaning you seldom (more like never) give real answers that a person can use

let me demonstrate how it is supposed to be done

OP here is your problem

you might be trading with a bucket shop, verify that data you broker gives you is the same from other legit sources, almost every tick should be the same

your broker may have been a good one, that NOW TURNED on you, so you have to verify

SECOND

Don't use limit orders, stop should be stop and nothing else

Those like Redneck Trader who are saying that they can SEE other people's stop, he is referring to reading charts, He can not in actuality see your stop on level 2. He can guess pretty well where it is though

if you are trading FX your stop should be held with your broker, Assuming you have a legit ECN broker like IB

if you are trading futures and stocks, you are better off with stop being held at the exchange, much faster, reduced slippage, and no one can see it anyway

THIRD

if you eliminated all above, now you must consider that your edge, has burned away or is entering deep draw down

you need to reassess you trading skill and figure out if you have any skill in the first place

maybe your stop should now be used as ENTRY

or maybe your signals should now be opposite and your stop AN EXIT

bottom line my friend, EDGE is something only you can fix if you have the ability

See redneck trader that is how a useful post is supposed to look like, otherwise why do you bother posting at all

 

[focusonmoney]

Quote from pbj:

If your 100 pip stops are "virtually guaranteed" to be hit, then you have found a gold mine. Just place a buy limit order at the price where your sell stop would have been, and you will be raking in the profits and can wake up to a gain in the morning.

I doubt the market will go up or down just for one person stop.. The market will only collect a whole bunch of stops at a time.. Stop making excuses for this guy... He entries must be bad or something..

 

[Gcapman]

Quote from Kicking:

Stop the nonsense about me and charts. Just because you are a freaking daytrader with one minute charts on your screen doesn't mean everybody is like you.

Redneck : How do you see stops on Level II, level II AFAIK does not allow you to see that info. I believe the specialist can see some stops, but I don't understand what you mean. Also if stops are sent to the exchange, futures exchange for instance , it's my understanding noone among the market makers has (should have ) that information .
But the phenomenon I describe is definitely more prevalent in FX where stops are just depleting your account. Part of it is certainly the heightened volatility these past couple years but I swear very often there is just one spike that will take out the stop. And it's not at the broker level, the market just goes through it, my guess is it's also the liquidity providers that must have some kind of info .

Don't kid yourself

If you knew how to read charts, there is no way you would be getting mauled for 100 pips

Charts of stocks, gold, forex, index futures -- they are all the same -- if you know how to read one instrument, you know to read them all ! ! !

 

[trend2009]

this is an excellent post.

Quote from Kicking:

I have always accepted the idea that on an an exchange, stops are not seen by anybody, FX is different of course. But I noticed over the years especially those past two years, that in any market , any stop serving the purpose of limiting my losses is likely to be triggered.

And despite using one of the better FX brokers, if I place a stop, it's virtually guaranteed it will be triggered, even if it's 100 pips away. I also allow for a 20-30 pip margin past the key level that I think proves me wrong. Still it will most of the time be triggered by a spike . I have used stops only overnight, but now I no longer use them because it's guaranteed I have a loss in the morning. Placing a stop is akin to asking for a loss.

I am starting to believe in conspiracy theories.

 

[FredBloggs]

facts:

1/ most people tend to put stops in the same place - around support & resistance levels, fib levels and other ta points. therefore, if you look at a chart, it's fairly easy to 'see' the stops. if you know where stops are, you know where you can cover your trade if you are big enough to nudge the market (on exchange) or miss-quote (if bucket shop). this is part of my strategy as it happens.

2/ ALL trading platforms will have an associated risk module that allows brokers to see customer orders (including stops). how else do they pull customer orders on request or when they blow up? therefore, your broker can see your stops, and so can his clearer who essentially underwrites that brokers business. if your broker, or who ever clears his trades is part owned by a bank, then that bank will probably have a prop desk. guess what.....

3/ read up on flow trading and what that entails. this is especially true of equity brokers, where they pretty much all sell their order flow (ie stop order locations) on to market makers to be filled. this is legal and in the small print of most brokerage agreements.


stop loss orders are a creation of the industry to get you to trade more. this is done under the guise of 'education' and 'prudent risk management'. all marketing to sucker fools in who know little about the industry. nothing more, nothing less. they generate revenue for the broker.

its better not to have an order in the market unless you have to be away from your desk. this way, you can watch how the market trades at your level and decide if the move is false or real.

you have been told.

the end.

 

[mikasa]

Quote from FredBloggs:


its better not to have an order in the market unless you have to be away from your desk. this way, you can watch how the market trades at your level and decide if the move is false or real.

you have been told.

the end.

absolutely not

in futures market, without stop order you will one day have your head taken off so cleanly, you won't know what hit you

in futures you can have a 100 point move in 2 seconds

you need a stop at some point, you can blow up in one day without it

now having said that

you bring up a good point

most people are naive when it comes to their brokers and naive when it comes to automated strategies on their broker's platforms

so people are dumb, but what else is new, unless you clear yourself, you are stuck hoping your broker won't lick you up

 

[NoDoji]

Quote from Redneck trader:

Well…. One scenario (there are a couple)

Orders start stacking up above /below the inside bid or ask

Some of those orders correspond nicely to where logical (the less experienced money’s) stops would be placed – as seen on a chart

All the sudden you see a wick on a candle appear – sometime it a real nice long wick to get em all :eek:

Then Price continues on its merry way



RN

RN, I had this happen yesterday and the inside bid/ask didn't even move; my STP which was quite some distance away from the Ask suddenly turned black, I was down $78 and price continued from in what would've been my favor.

I don't really understand how this happens. If for example the inside bid/ask is 25.20/25.21, how can a stop @ 25.30 be lifted without those bid/ask prices even moving.

Do you avoid using hard stops at all as a result this possibly happening?

 

[riskaddict]

stop loss orders are a creation of the industry to get you to trade more. this is done under the guise of 'education' and 'prudent risk management'. all marketing to sucker fools in who know little about the industry. nothing more, nothing less. they generate revenue for the broker.


I always thought the same thing!! You can always take a loss whenever you want why use a stop order when? HOW a price gets to where it is is just as important as where it is.

 

[NoDoji]

Quote from riskaddict:

You can always take a loss whenever you want why use a stop order when? HOW a price gets to where it is is just as important as where it is.

I place an initial hard stop at the price level that would invalidate my trade. This serves two purposes:

1. Gets me out of an invalidated trade automatically, which basically prevents me from acting improperly on thoughts such as "Oh I can give it a bit more room..." or "I could just hold this position then add to it if price gets to there..." or "Holy sh*t, why is price falling a dollar every 20 seconds..."

2. Protects me in the event my trading platform locks up or there's a power failure. And trust me anything seemingly impossible can find a way to go wrong, and trading is not the environment you want to be in without protection. Not long ago we had a power outage about 4 seconds after I put on a position more than twice my usual size and had just put in my stop. We have two internet connections and UPS's on our systems, but as luck would have it the internet connections somehow both failed and by the time we got them back, the UPS's had timed out. In that hour of downtime, I could easily have been down 2-3 times my max daily loss with this volatile stock.

 

[Myshkin]

Quote from NoDoji:

I place an initial hard stop at the price level that would invalidate my trade. This serves two purposes:

1. Gets me out of an invalidated trade automatically, which basically prevents me from acting improperly on thoughts such as "Oh I can give it a bit more room..." or "I could just hold this position then add to it if price gets to there..." or "Holy sh*t, why is price falling a dollar every 20 seconds..."

2. Protects me in the event my trading platform locks up or there's a power failure. And trust me anything seemingly impossible can find a way to go wrong, and trading is not the environment you want to be in without protection. Not long ago we had a power outage about 4 seconds after I put on a position more than twice my usual size and had just put in my stop. We have two internet connections and UPS's on our systems, but as luck would have it the internet connections somehow both failed and by the time we got them back, the UPS's had timed out. In that hour of downtime, I could easily have been down 2-3 times my max daily loss with this volatile stock.

NoD, first, utmost respect for you, your journal and all the little dojis, be they dragonflies, gravestones, morning styles or in evening attire (or perhaps you are the personification of the anti-doji, the chart that is the absolute negation of the doji in all its myriad forms, a period of hammers and soldiers, hangmen, outside and inside bars, doji free, through and through...

sorry, to the point, the second point (as the first is perfect and totally subjective regarding where one is at in their trading mind), i will put in a super back up stop way out from the greedy digi-talons of "those that would steal stops" that are kinda close, just in case the power goes out or some crazy news comes out to open a gnarly can of 7 sigma blowout on whatever it is i am trading.

just an idea and much thanks for your journal and other posts, always well thought out