Profitable spikes?

[Phil Mibbutz]

I've seen plenty about spikes triggering stop losses, but has anyone ever made an unexpected profit from a spike going in their favour? If not, this might tend to suggest that sudden changes really are just used by SB companies to fleece customers.

 

[Roberto]

I've seen plenty about spikes triggering stop losses, but has anyone ever made an unexpected profit from a spike going in their favour? If not, this might tend to suggest that sudden changes really are just used by SB companies to fleece customers.

Yes; I've had take-profit limit orders triggered by strange spikes more than once. One person's stop-loss can easily be another's take-profit limit, of course. I don't mean it rudely, but the fairly widespread impression that SB firms, in particular, are likely to profit overall from such spikes is actually limited to those who don't quite understand the mechanics of how SB works. (The reality is that retail forex brokers, for instance, are far more likely to be able to benefit from them than SB firms.)

 

[Phil Mibbutz]

Interesting... If this happened regularly, I assume there might be a way of using it to your advantage by setting an automatic 'profit limit' at a similar distance away as a stop-loss?

 

[Melody9999]

Hmmm - and you can see on Sharescope eg those shares that seem to be susceptible to spikes - for whatever reason - see BUR and PZC for example.

 

[Roberto]

If this happened regularly, I assume there might be a way of using it to your advantage

I see exactly what you mean ... I don't know if it does, though!

I've heard that it's almost "regular" that FXCM have a Sunday evening (UK time) spike (close to when they open for the week) which no other forex bucketshop has, but this is hearsay only in that I've only actually seen it myself on one occasion.

I've also heard that it's particularly common with Saxo"bank" who indeed have a widespread reputation throughout the internet for this and much other nefarious activity, but that's entirely hearsay because I've never touched them myself (and honestly don't intend to after most of what I've read!)

 

[Phil Mibbutz]

If it's really possible to profit from spikes, then it's surprising that spreadbet companies don't filter them out, rather than deliberately put them in, as often imagined/alleged?

 

[Melody9999]

Phil - I'd suggest its the MMs that cause the spikes, not the SB co's. I'm fairly new to s/betting so I've only seen spikes work against me in buy and hold positions. However when shorting a stock I guess it should work the other way.

 

[axthree]

Having looked back through my records I've proffited several times from spikes.
I would however add that two of my bigger losses were also caused by spikes.