Can someone give the less experienced among us an explanantion as to why the "big boys" would do this. What advantage do they gain in the process?
shoot2scoot
Active member
- Messages
- 150
- Likes
- 1
Justin, we've all done similar at some time so don't beat yourself up. Going back to your point I agree that it may offer some comfort to have pivots up but so would Fib retracements, trendlines etc. The point I guess that I am still struggling with is that we need to have confidence in the stats so that we don't feel the need to interfere or need the comfort of seeing resistence/support to protect our SL?
Hey, the important thing is that the outcome was positive today.:cheesy:
wiseambitions
Established member
- Messages
- 764
- Likes
- 7
Recent winning performance is as follows:
A) From the latest 100 trades (these do include Christmas)
FMT settings +525
Old FMT set +640
10tp/40sl +650
28/40 +488
B) Last 200 possible trades
FMT settings + 1645
Old FMT set + 1920
10/40 +1100
28/40 + 1588
At the moment the old FMT settings 40/40 seem to be doing better than 35TP plus break even. This is not always the case. The information given above (E&OE) may be helpful if looking for income from the investment, however due to differences in profit factor and drawdown they don't give the best rankings where you might be going for capital rollup.
A) From the latest 100 trades (these do include Christmas)
FMT settings +525
Old FMT set +640
10tp/40sl +650
28/40 +488
B) Last 200 possible trades
FMT settings + 1645
Old FMT set + 1920
10/40 +1100
28/40 + 1588
At the moment the old FMT settings 40/40 seem to be doing better than 35TP plus break even. This is not always the case. The information given above (E&OE) may be helpful if looking for income from the investment, however due to differences in profit factor and drawdown they don't give the best rankings where you might be going for capital rollup.
shoot2scoot
Active member
- Messages
- 150
- Likes
- 1
Can someone give the less experienced among us an explanantion as to why the "big boys" would do this. What advantage do they gain in the process?
Johnny Hi, not sure if I can help because my understanding of 'stop hunting' is slightly different?
Most traders (not us) are taught to place the SL technically, behind a natural point of resistence/support. These could be previous highs/lows, pivots, 61.8% Fib retracements, trendlines and round numbers (plus others).
As price action gets near to a point of natural resistence everyone gets cautious expecting a possible reversal. What 'stop hunters' do is pump large amounts in at this point to continue through the resistence/support (as trading volumes often decrease at this point it is realistic to do this). If they succeed in hitting everyones stops beyond the resistence/support this has the effect of taking out the oposition and accelerating the move through the resistence/support. This then gets everyone excitied and all jump on the bandwagon, reinforcing the move. This is why you often get a sudden lurch after breaking through significant resistence.
The term therfore means trying to hit a place where large numbers of SLs are naturally placed in order to accelerate an existing move.
Hope that helps?
Chris
Last edited:
podberry
Well-known member
- Messages
- 395
- Likes
- 1
Well said shoot2scoot
I've been reading the posts for the last 2 days with tongue and cheek and am amazed how many people are re-inventing the wheel, some of the more experienced traders are looking at better set-ups granted, and I am sure they will benefit. Seems to me some of the newbies are grasping at any new settings to speed up their cash register. I am willing to eat humble pie if proved wrong. Remember Mark must of spent countless hours testing and backtesting and has come up with a winning formulae, so why deviate ? He has changed the settings once in 2 years, not every other week
If it's not broken why fix it !!!!.:innocent:
I've been reading the posts for the last 2 days with tongue and cheek and am amazed how many people are re-inventing the wheel, some of the more experienced traders are looking at better set-ups granted, and I am sure they will benefit. Seems to me some of the newbies are grasping at any new settings to speed up their cash register. I am willing to eat humble pie if proved wrong. Remember Mark must of spent countless hours testing and backtesting and has come up with a winning formulae, so why deviate ? He has changed the settings once in 2 years, not every other week
If it's not broken why fix it !!!!.:innocent:
Last edited:
Well PB, I totally agree with you. Tweaking with the standard setup might or might not benefit newbies like me at all. I still trust Mark that's why I have bought this system.
Can someone give the less experienced among us an explanantion as to why the "big boys" would do this. What advantage do they gain in the process?
At certain times of lower liquidity a few large orders can move the market. I believe that this is not so common with forex, but certainly happens with the stockmarkets.
For example, the market is bullish and the Big Boys want to get in on the bullish move.
They first put in a series of orders to sell and when the trading volume is relatively low, these sell orders can move the market down.
Other technical traders see the price moving lower against the trend and jump on the bandwagon pushing the price lower still.
Nearly everyone who is long in the market has their stops around a recent swing low and the Big Boys know this. When these stops are hit, they are effectively sell orders and these stop orders continue to push the market down.
This is the time that the Big Boys start to liquidate their short positions and as they are large orders, the market will usually stall for a while as they liquidate all their short positions. By liquidating their short positions they are effectively buying into the market
At the same time they are opening new long positions as they are still bullish, their shorts were just fake-outs.
The large new bullish orders as well as the liquidation of their short positions pushes the market up again in the anticipated direction. Others jump on the bandwagon and there is a strong bullish move.
Meanwhile those traders that saw their long positions stopped out are left fuming when they see the market move only a little past their stop and then steam up.
H
helixpt
I don't see how.
I'm at std settings using 8 start hour 30 start minute at alpari uk and got stopped at BE.
Live account...
Are you still using 7:30 hours ?
Last edited by a moderator:
shoot2scoot
Active member
- Messages
- 150
- Likes
- 1
Sadly you needed to be at 07.30 not 08.30 at Alpari UK
Hey at least you didn't lose money!
Chris
I can't be sure, but I think that despite all the discussion here about the clock change, you probably still got the entry time wrong.
mike1booth
Member
- Messages
- 65
- Likes
- 0
First of all, apologies to everyone. Did the analysis today on deserteagles 43tp/65sl/20be, and came across an error on one of my formulas. Doesn’t make a massive difference but it did take 55tp/40sl/20be above 50tp/40sl/20be.
Here are the revised figures:
To remind you, the three columns represent profit in pips on the different tp/sl/be settings.
1st column being 1/Dec/09 to 31/Jul/10
2nd column being 1/Aug/10 to 28/Feb/11
3rd column being total of the two.
40tp/40sl : 1520/ 648/ 2168
35tp/40sl : 1185/ 618/ 1803
40tp/40sl/24be : 1560/ 886/ 2446
35tp/40sl/24be : 1290/ 761/ 2051
40tp/40sl/20be : 1520/ 926/ 2446
35tp/40sl/20be : 1330/ 806/ 2136
40tp/35sl/20be : 1515/ 1054/ 2569
45tp/35sl/20be : 1595/ 1138/ 2733
50tp/40sl/20be : 1530/ 1013/ 2543
55tp/40sl/20be : 1685/ 948/ 2633
And now the one you’ve been waiting for. I have been impressed reading DesertEagles posts and examining his spread sheets. It is obvious he has done his homework. The figures bear this out:
43tp/65sl/20be : 1927 / 1228 / 3155
BUT! (sorry, there is always a “but” isn’t there?)
As discussed in an earlier post, it’s essential to get a balance between the right set and the system you use when deciding how much to risk per trade.
If you trade with the same amount each time (say 2% of your original bank) then had you traded in the above period you would have made quite a bit more profit with 43/65/20. However, using a compounding 2% trade risk, because of the high sl of 65, it does not compare as favourably when the figures are run through. For example, taking the same period as above, Dec 2009 to Feb 2011 comparing 45tp/35sl/20be with 43tp/65sl/20be;
Starting bank of 10K with 2% risk compounded –
45tp/35sl/20be profit 44,481
43tp/65sl/20be profit 15,925
Quite a difference! Of course you may decide to increase your % risk on a set that wins more often to compensate. Hope this is helpful, and thanks to Deserteagle for permission to publish.
Mike
Here are the revised figures:
To remind you, the three columns represent profit in pips on the different tp/sl/be settings.
1st column being 1/Dec/09 to 31/Jul/10
2nd column being 1/Aug/10 to 28/Feb/11
3rd column being total of the two.
40tp/40sl : 1520/ 648/ 2168
35tp/40sl : 1185/ 618/ 1803
40tp/40sl/24be : 1560/ 886/ 2446
35tp/40sl/24be : 1290/ 761/ 2051
40tp/40sl/20be : 1520/ 926/ 2446
35tp/40sl/20be : 1330/ 806/ 2136
40tp/35sl/20be : 1515/ 1054/ 2569
45tp/35sl/20be : 1595/ 1138/ 2733
50tp/40sl/20be : 1530/ 1013/ 2543
55tp/40sl/20be : 1685/ 948/ 2633
And now the one you’ve been waiting for. I have been impressed reading DesertEagles posts and examining his spread sheets. It is obvious he has done his homework. The figures bear this out:
43tp/65sl/20be : 1927 / 1228 / 3155
BUT! (sorry, there is always a “but” isn’t there?)
As discussed in an earlier post, it’s essential to get a balance between the right set and the system you use when deciding how much to risk per trade.
If you trade with the same amount each time (say 2% of your original bank) then had you traded in the above period you would have made quite a bit more profit with 43/65/20. However, using a compounding 2% trade risk, because of the high sl of 65, it does not compare as favourably when the figures are run through. For example, taking the same period as above, Dec 2009 to Feb 2011 comparing 45tp/35sl/20be with 43tp/65sl/20be;
Starting bank of 10K with 2% risk compounded –
45tp/35sl/20be profit 44,481
43tp/65sl/20be profit 15,925
Quite a difference! Of course you may decide to increase your % risk on a set that wins more often to compensate. Hope this is helpful, and thanks to Deserteagle for permission to publish.
Mike
H
helixpt
But that way you're trading at Alpari's 7:30h and thats the same of trading 6:30 London time since Alpari's clock is at gmt+1 and london is actually at gmt+0... Weren't we supposed to trade before london open at 7:30 London time?
thank you for your feedback
No ! ..FMT trades one and a half hours before London open, 6:30 am London time !
If you are using Alpari UK, set the EA to trade at 7:30 !
How difficult can this be ?..
Adamus
Experienced member
- Messages
- 1,898
- Likes
- 97
Hi Sunny,
I am never sure whether this kind of scenario is real or ever happens. I can believe it, but I'd appreciate knowing what kind of numbers are involved here.
How much are the big boys selling to get the price to move down to the stops, and how much order flow do they get from selling into those stops? And then what? Do they just buy back once the rush through the stops is over? Presumably fast enough to get out down at that level?
And so what kind of money are they making by doing that and how many of the big boys get up to these tricks? I figure there are quite a few prop traders out there with the capacity to move the market like that.
Hi Adamus,
I wish I had those numbers with me but really it does not make any sense to get a spike of 15 to 20 pips without any news in the opposite direction of current trend and then the price resumes immediately to previous trend. As I had mentioned this does not happen all the times but I have seen few times to believe there must be some gain for the market movers in this zero sum game.
I found one good article that does make some sense:
http://www.investopedia.com/articles/forex/06/StopHunting.asp
Interesting quote from the article:
"Because of this unusual duality of the FX market (high leverage and almost universal use of stops), stop hunting is a very common practice. Although it may have negative connotations to some readers, stop hunting is a legitimate form of trading. It is nothing more than the art of flushing the losing players out of the market. In forex-speak they are known as weak longs or weak shorts. Much like a strong poker player may take out less capable opponents by raising stakes and "buying the pot", large speculative players (like investment banks, hedge funds and money center banks) like to gun stops in the hope of generating further directional momentum. In fact, the practice is so common in FX that any trader unaware of these price dynamics will probably suffer unnecessary losses. "
Last edited:
GumRai:
You're correct 88.5 and 87 are in USD not pips, I just cut and pasted from my statement. I'm using TMT seetings with first take profit at 35 / 40 sl size = 50% and second position size 50% with trailing at the example settings in the TMT manual, and it seems coincidental that it hit the trailing stop near TP on the second.
I'm really not sure why it traded at around 08:00 (GMT+2). I'll have defer this question to Mark, after I research this a bit more.
Happy trading...
Last edited:
Hi Podberry,
Thanks for the post- I totally agree with you.
Unfortunately I think I was one of the 'newbies' that have looked at testing different settings.
But thanks for your post and reality check, I have realized that I need to follow the rules- and the rules include TP35 SL40 and BE20.
So by not using these settings, I am breaking the rules. (Which is what we paid for).
I think I need to evaluate my daily trading, not by pips gained/lost, but rather by whether the rules were followed or not.
Many Thanks
M
