Stop Loses - how much manipulation is going on?

[timmhaan]

In Forex, it seems that no matter where i put a stop lose, i get tagged out of it too often. more times than not, it's not even a steady progression to where my stop is, it's a massive wick that conventiently just touches my price before immediately reversing. Doesn't even seem to matter which currency i'm trading, or particularly where my stop is.

this is making it very difficult to hold any position for any length of time and i've lost too much money getting stopped out. it smells fishy to me.

[Albert0373]

I don't trade Forex but sounds like some manipulation is going on.

It's a very common thing in pennies too and low volume traded stocks.

MMs can see where your stop losses are and can knock you out only to run the price back up.
Not saying that is what's happening to you, but it is a possibility.

[timmhaan]

i think most of time when this happens, it's big players.

Here is an example I saw today. many people, i'm sure, got tagged out of their positions on the short side. the commentary reads (in case the screenshot is too blurry): USD/JPY stops tiggered to the top side 95.00-10 as NY Bk is the culprit

[yoyomama]

MMs can see where your stop losses are and can knock you out only to run the price back up.
Not saying that is what's happening to you, but it is a possibility.
That's actually pretty frightening.

[Florida]

I don't trade Forex but sounds like some manipulation is going on.

It's a very common thing in pennies too and low volume traded stocks.

MMs can see where your stop losses are and can knock you out only to run the price back up.
Not saying that is what's happening to you, but it is a possibility.

As Albert0373 says, low volume and penny stocks, don't worry about it on stocks with adequate volume and reasonable price levels, it just does not happen. The MM's have much more to worry about than running a stop on some Newbies 100 shares of any given stock. I use hard stops on 99% of my trades, and can count on one hand the number of times something suspicious has happened around my stop levels.

Now I am speaking of equities, and do apologize if we seem to be waivering from the original thread on running stops in 4X, as I do not know much about them.

[timmhaan]

As Albert0373 says, low volume and penny stocks, don't worry about it on stocks with adequate volume and reasonable price levels, it just does not happen. The MM's have much more to worry about than running a stop on some Newbies 100 shares of any given stock. I use hard stops on 99% of my trades, and can count on one hand the number of times something suspicious has happened around my stop levels.

Now I am speaking of equities, and do apologize if we seem to be waivering from the original thread on running stops in 4X, as I do not know much about them.

yes - totally agree. i've never had these issues in equities. i'm about 3 months into my venture in forex, so i'm still learning. this is just one of the attributes of forex that differs a bit from stocks, but i'm sure it can be overcome. essentially it's a failed breakout, so it may be possible to profit from it if you can read it correctly.

[sofia]

The currency trader can restrict his future losses by placing an order instructing the trading platform to buy or sell, the moment the market drops below the previously established price. Placing a stop-loss within Finexo's sophisticated trading platform decreases the risk for the trader, as the system will close the trade if the market value drops below the point defined within the order, thus limiting the losses.

[lg4to32]

Two possibilities:
First, it sounds like your broker does something fishy, because online forex trading broker are all bucket shops, so they may play w/ ur stops,
Second, you put ur stop on a bad level. and it's just happen that all the big market player seen it as an important level so they might overshoot it in order to get quick profit by triggering stops.

[sofia]

Its true...

It depends on several things, mainly two things:

(1) Your Psychology
Are you risk averse? Or are you willing to take a loss or a scratch trade (break even) for a potentially bigger reward?

If you don't like losing, take a tighter stop.
If you are ok with giving space for a potentially larger reward, use loose stop.

(2) Statistical Edge
Immerse yourself in whatever your trading and mentally play out both scenarios (tight vs wide stop). Do you notice that price tends to "stagger" and "consolidate/range" before taking off? Then use an initially larger stop and then tighten it up as you the trade goes more into the green.

Does price take off almost immediately? Then move your stop to breakeven quickly.

Study the markets and see at what level this "taking off" tends to happen.