How do you recover from a £25,000 loss....

[Brock Landers]

markets are also a bit like a swiss ball. An unexpected rate hike will pop it, but under normal conditions, it can get either too long or too short to go any further without first getting rid of some positions.

This is not precisely the same as what dinosaur toast was saying, he was talking about pools of liquidity and their - often telegraphed - locations. In a perfect world, every investment fund would have a sillouette, and each position one took would be covered by the other. In reality, however, there are only so many participants in the market which serve as an intermediary betwixt the two. As such, there are times when, say, a rally has gone too far to give shorts an exit opportunity (ha! imagine than, pullbacks as EXITS?!?!), or the capacity for new long positions has been exhausted.

So, they are like a swiss ball. Often being worked into odd shapes, stretching just enough to accomodate the pressure, and then reverting to mean. That is, until a crazy non-farms, or emergency rate cuts, when the previous ball capitualates and is replaced when appropriate.

 

[BeginnerJoe]

Do you see any difference in results for singular or collective third party traders for them to either run stops under your entry or to run a load of pending orders above?

It's conceivable your stop could be taken out by fellow casino goers. But that would be coincidental as they don't really have the information of what stop is at where and who bought what at what level. I believe the tree shaking is usually done by very large players and by the market makers themselves. They know exactly who's stops (aka ar*e) are hanging out there for a rape.

 

[brettus]

It's conceivable your stop could be taken out by fellow casino goers. But that would be coincidental as they don't really have the information of what stop is at where and who bought what at what level. I believe the tree shaking is usually done by very large players and by the market makers themselves. They know exactly who's stops (aka ar*e) are hanging out there for a rape.

Yea but not your 1 lot of the ftse. It's usually where there are new highs and lows. A lot of guys buy above highs and sell below lows. They get cleaned out more often than not.

 

[Brock Landers]

Yea but not your 1 lot of the ftse. It's usually where there are new highs and lows. A lot of guys buy above highs and sell below lows. They get cleaned out more often than not.

my personal view is that high/low ticking is not done to trigger stops specifically, but rather to paint an illusion of strength/weakness.

 

[BeginnerJoe]

If its a long only instrument; how? For example a banking stock, where there are no short sellers.

Who is making a profit from this transaction (ie. your stop getting hit)? and how?

Who is "they"?

No short selling doesn't mean there is no selling. Large institutions and market makers can use their holdings for a bit of selling. Doing so knocks you out and they pick up some cheap stocks from you to cover their selling. Their overall position is unchanged. It's free money for them.

'They' are those who are in position to whack you on the head and take money from you. Their precise identity is not relevant. If you are not the whale then you are the plankton feeding the whale.

 

[BeginnerJoe]

Yea but not your 1 lot of the ftse. It's usually where there are new highs and lows. A lot of guys buy above highs and sell below lows. They get cleaned out more often than not.

They will move prices for tiny amount of profit. If they have nothing better to do, they will take the 1 lot from you.

 

[brettus]

They will move prices for tiny amount of profit. If they have nothing better to do, they will take the 1 lot from you.

ok, if it was the only lot traded on the day. I think everyone assume these guys know what they are doing... Most of them lose a sh*t load of money with guaranteed 1mio$ salarys.

 

[scose-no-doubt]

Joe, how many different parties do you think hold lots at each and every level, in each direction, getting it at different times, and for different reasons?

 

[BeginnerJoe]

Most of them lose a sh*t load of money with guaranteed 1mio$ salarys.

That's just wishful thinking. On aggregate, they make tons of money from casino going joe's who think they are 'trading' when in fact they are playing roulette.

 

[Brock Landers]

Joes like you, you mean.

 

[BeginnerJoe]

Joe, how many different parties do you think hold lots at each and every level, in each direction, getting it at different times, and for different reasons?

Unless you can show the statistics, I would say most players jump on board roughly at the same place when they think there is going to be action. So the whale comes in, opens its big mouth, and gobbles the lot up.

 

[Jason101]

How about a situation where 3rd party directional traders move prices towards liquidity/stops via natural market movements, where the market makers finish the job off by refining the fills to make sure they are not out of pocket. Therefore pipping the directional traders to the pip on the stops, at low liquidity moments.

 

[BeginnerJoe]

Joes like you, you mean.

I don't play, except in long term equities holding.

 

[scose-no-doubt]

Unless you can show the statistics

Are you fu*king joking, Joe? Have you never seen a volume bar?

 

[BeginnerJoe]

Are you fu*king joking, Joe? Have you never seen a volume bar?

Volume can be faked. Market makers buy and sell without paying a cost. If they so choose, they can give you volume. In any case, like I said, the casino going joe's congregate at specific places as indicated by your volume.

 

[Brock Landers]

Unless you can show the statistics, I would say most players jump on board roughly at the same place when they think there is going to be action. So the whale comes in, opens its big mouth, and gobbles the lot up.

lo and behold, this happens to be pretty much at the same place and time that the plankton all start to check their P&L, get a bit jittery, talk to other plankton, stop thinking straight and panic.

who'd a thunk it.

 

[brettus]

Volume can be faked. Market makers buy and sell without paying a cost. If they so choose, they can give you volume. In any case, like I said, the casino going joe's congregate at specific places as indicated by your volume.

How much volume do you think is actually going through then? I think it's a lot more than you think.

 

[Bint_Crusher]

Sadly a trader needs to go through this process of blowin up an account a couple times to really learn the power and value of risk management. I doubt there is anyone out there who is now churning a profit that hasn't sung this sad tune before. Pick yourself up and try not to do it again but realize it is part of the process. Once you never do this again then you are a real trader.

Only an appendage hoover starts out trading thinking like this. Ask yerself, "do you wait for the baliffs arrive to turf you out of your house before you realise that paying your mortgage on time every month is a good thing to do"? Do you wait until you are stuck in the slammer and lose yer licence before you learn the power of thae law if you drive whilst
intoxicated? Do you wait until yyer wife runs off with her 18 year old toy boy before arranging the drilling of his kneecaps?
The same applies to trading, there are inumerable cases every year of buy and hope stocks/assets that drop in price and wipe out accounts all because the investor thinks he can ride the storms in the market without a protective stop loss.
Wrist job;wrist job;wristjob:wrist job;wristjob:wrist job;wristjob:wrist job;wristjob:

 

[wallstreetwarrior87]

No short selling doesn't mean there is no selling. Large institutions and market makers can use their holdings for a bit of selling. Doing so knocks you out and they pick up some cheap stocks from you to cover their selling. Their overall position is unchanged. It's free money for them.

'They' are those who are in position to whack you on the head and take money from you. Their precise identity is not relevant. If you are not the whale then you are the plankton feeding the whale.

Hi Joe, short selling means taking a position to the downside with a need to cover even lower to make a profit.

If your example means that "they" already hold long and are there for dumping stock previously bought at lower prices , then why would they do this if no advantage is being obtained. If the market is liquid there is no way an institution would off load into downside liquidity because this would create bad average prices for them as they would be selling lower and lower, this is not good practice.

If the market is low on liquidity then they would be causing prices to fall hard (they get worse prices to sell at) and prices to spike back up fast (the get worse prices to purchase at) there for not obtaining any advantage.

People need to understand the purpose of a market maker, why are they involved? Do you believe they run stops 10 pip/points away to gain a profit on their holdings? From how far away would they indeed gun a stop? How long do they hold a postion?

You stated that volume can be faked. This is not true on transparent instruments. No transaction = no volume (and all in real time). On other instruments volume can be delayed, this is another matter, but unless one knows or has a deeper understanding of market structure nothing of value can be obtained other than stating the obvious.

As a retail trader, we will always be the plankton in a business with big whales, we just need to make sure we dont sit there with a cherry on our heads, lets not make ourselves to appealing.

There are so many more components involved in this subject area that it would be impossible to progress on a forum. Im afraid there is not one answer to this, price movement involves so so so many variables. Some many even assume price movement to be random. If this is the case then there is no point in worrying about things such as stop hunts, you will just have to accept they occur and get on with it.

Actually, if one states that they believe that "someone" is gunning for their stops, then they are stating that it is NOT random, there for "someone" must have a motive. Interesting:whistling

 

[the hare]

There's a great quote by one of the traders in the film floored. He says:

"the market is a whore—it's out to **** as many people as it can"

I thought that was quite perceptive.