Stop hunting with the big players

Skill Leverage said:
Exactly. That way all the work has been done for you. Once you get to know your market and how far stops tend to trigger based on the strength of a 'level', you can just bid/offer in the appropriate place and take the easy buck. Much better than constantly buying the high on the off chance that it breaks out.
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buying the high is fine if what you're trading is in an uptrend, but if it's just chopping around and maybe drifitng higher you're have death by 1000 cuts!
 
foredog said:
buying the high is fine if what you're trading is in an uptrend, but if it's just chopping around and maybe drifitng higher you're have death by 1000 cuts!
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Sure, but there's not exactly a clear trend in the example provided is there?!
 
My biggest issue with the direction of this thread as it was presented originally was that the idea is to try and guess where the BIG players stops are, but the thinking on where these actually reside bears no resemblance to where the big players actually do put their stops, and how / why this is so. It's a laudable idea in theory, just completely incorrectly followed through, and the critique of it has gradually exposed more and more incorrect assumptions about the market.

These, depending on your knowledge base, are understandable, but it doesn't mean when confronted with evidence to the contrary that you shouldn't be prepared to revise your opinion.

My $0.02

GJ
 
Nope, thats where the experience/knowledge comes in knowing when a breakouts a breakout. I'll let you know when i figure it out:LOL:
 
GammaJammer said:
My biggest issue with the direction of this thread as it was presented originally was that the idea is to try and guess where the BIG players stops are, but the thinking on where these actually reside bears no resemblance to where the big players actually do put their stops, and how / why this is so. It's a laudable idea in theory, just completely incorrectly followed through, and the critique of it has gradually exposed more and more incorrect assumptions about the market.

These, depending on your knowledge base, are understandable, but it doesn't mean when confronted with evidence to the contrary that you shouldn't be prepared to revise your opinion.

My $0.02

GJ
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I've accepted that, was just trying to discuss another way around it but it's pretty clear you can't pick where the stops are and that trading S&R based on where they MIGHT be is a better way to do it going long or short of the zone.
Why would he write the article though if he didn't use the strategy?
 
SanMiguel said:
I've accepted that, was just trying to discuss another way around it but it's pretty clear you can't pick where the stops are and that trading S&R based on where they MIGHT be is a better way to do it going long or short of the zone.
Why would he write the article though if he didn't use the strategy?
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££££
 
Basically. The web is a big place. Just because someone writes something, doesn't mean they know something. And best I could tell from the bio, this guy is trying to make very very specific assumptions about a world he simply hasn't worked in (i.e. the idea that basic human posychological tendancies towards round numbers extends to the people trading large enough amounts to consistently move the market, AND that this doesn't change over time even with the schisms we have had in FX over the past few years, AND that it gives you a genuine edge).

There is an awful lot of this kind of stuff on the web. SOme of it is badly written, and so anyone can spot that it's utter guff. But this guy, to give him his credit, actually makes a few reasonable points, and makes them reasonably eloquently. So it's understandable that people could be a little more likely to be drawn in. But his bio screams chancer to me. I't telling you, with absolute certainty, that the big guys these days do NOT stick their stops at these levels just because they end in a round number. They simply don't. I get paid to know this stuff, all day, every day, and react to it.

And even if you knew where all the stops were, that still wouldn't give you an edge. That's not even half the picture. It's just taking a tiny nugget of something and trying to extrapolate a whole worldview from it.
 
GammaJammer said:
Basically. The web is a big place. Just because someone writes something, doesn't mean they know something. And best I could tell from the bio, this guy is trying to make very very specific assumptions about a world he simply hasn't worked in (i.e. the idea that basic human posychological tendancies towards round numbers extends to the people trading large enough amounts to consistently move the market, AND that this doesn't change over time even with the schisms we have had in FX over the past few years, AND that it gives you a genuine edge).

There is an awful lot of this kind of stuff on the web. SOme of it is badly written, and so anyone can spot that it's utter guff. But this guy, to give him his credit, actually makes a few reasonable points, and makes them reasonably eloquently. So it's understandable that people could be a little more likely to be drawn in. But his bio screams chancer to me. I't telling you, with absolute certainty, that the big guys these days do NOT stick their stops at these levels just because they end in a round number. They simply don't. I get paid exorbitant sums of moneyto know this stuff, all day, every day, and react to it.

And even if you knew where all the stops were, that still wouldn't give you an edge. That's not even half the picture. It's just taking a tiny nugget of something and trying to extrapolate a whole worldview from it.
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Fixed your post buddy ;)
 
There's stops everywhere. Some funds etc may just use big numbers as itt's simple but then others might be thinking that all the idiots stops are at 16200 so i'll put mine at 16210, but then the people stop hunting will eventually guess this so now is 16200 or 16210 the major stop level or 16222 becasue everyone knows they'll get stopped out at round number +10?
 
Typically there seems to be deference to the "big boys" on this website. Clearly the institutional traders are moving size and have the orders on their books. A word of caution, though. These big boys lost several hundred billion dollars last year (banks and hedge funds) so they are not always right. Furthermore, having spent over a decade working at large banks, I can assure you that there are a scarily high number of people (even fairly senior) who have no idea what they are doing when it comes to trading, but it doesn't stop them from doing it anyway.
 
meanreversion said:
Furthermore, having spent over a decade working at large banks, I can assure you that there are a scarily high number of people (even fairly senior) who have no idea what they are doing when it comes to trading, but it doesn't stop them from doing it anyway.
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i'll second that
 
yet again the lack of knowledge about trading in banks......too easy to say "These big boys lost several hundred billion dollars last year" and not qualify it. Treasury desks, market making, prop, fixed income, equity, credit . So many differnt departments.

I know many, many traders who had record years last year but were swallowed by losses on securitised rubbish.

I agree that there are quite a few people in senior bank positions that are clueless to say the least but the coal face traders have been doing ok. It's just the obvious books that have blown up-securitised mortgages and insurance on this crap.

The sell side traders in banks have been doing ver, very well; see JP and GS.
 
gooseman said:
yet again the lack of knowledge about trading in banks......too easy to say "These big boys lost several hundred billion dollars last year" and not qualify it. Treasury desks, market making, prop, fixed income, equity, credit . So many differnt departments.

I know many, many traders who had record years last year but were swallowed by losses on securitised rubbish.

I agree that there are quite a few people in senior bank positions that are clueless to say the least but the coal face traders have been doing ok. It's just the obvious books that have blown up-securitised mortgages and insurance on this crap.

The sell side traders in banks have been doing ver, very well; see JP and GS.
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I read an article that said the banks are counting on the traders to drag them out of this mess so credit where it's due.
In regards to that securitised rubbish, I've never understood how one bank didn't understand that they were buying air from another bank.
 
Right, and it's not the fault of guys in M & A that the world has gone to sh!t and they're struggling now to get anything done. People are too quick to lay the blame; they forget that no-one forced them to self certify for a house they couldn't afford, or put three Christmases on the credit cards.
 
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