Hey everyone! I just came across something interesting in MT4 called "hidden stop loss and take profit" it's like your little secret with the market because the broker doesn’t see these orders. They’re managed by an (EA). Has anyone tried this out? Did it spice up your trading results? I didn't know that.
As long as you are a small retailer, the MM is not interested to know where you put your STOP. At times, MM is bored with making the market; and he might use some sharp needles you poke you here and there, and your STOP. ough!!!
In the book Momentum Masters, David Ryan I believe said it that you should not have hard stop losses because it is targeted by market makers and big traders. Instead, use mental stop losses. They do not use take profit levels too because you limit your upside. I am only interested in best practices of the top traders to adopt in my own trading. Now, I have ditched hard stop losses and moved to mental stop losses only.
What is the difference? If your stop is at $10 and it trades at $9.99 does it make a difference whether it's a hard stop and gets filled right away or if it's a mental stop and you have to make a decision. At what point do you actually take your loss if it keeps dropping? Knowing of course that as soon as you sell, the market makers and the big traders will take the price back up. It always happens that way except when it doesn't!!
It is easier with a hard stop but, the market makers will be able to easily target your positions and grab your shares cheap. I believe it was David Ryan on Momentum Masters book I read that said this. There is another floor trader on the New York stock exchange who is now retired who was interviewed on a You Tube video. He said that market makers do target your stop losses. The way to avoid it is to wait till the stop losses has been triggered and the prices go down below the stop loss. Then, look to buy in the stock. That way, you get a more favorable entry on top of not getting stopped out. They will drive the prices higher right after. Even if it is a mental stop loss, you have to be disciplined to get out when it gets hit. I am just looking at the best practices of good traders and hopefully, adapt some of them in my trading.
Not sure what you are suggesting here. Are you saying that the entry is mental and you wait until your stop is hit, then you buy? Or are you going to average down if your stop is hit? If it's a mental stop, how long do you wait until you close your position? How far do you let it run against you before you capitulate? It's all about process. I'd suggest you write out your process to see if it makes sense. Mental stop; Why is it where it is? What do I do when it gets hit? If I don't close the position when it gets hit, when do I close the position. FWIW; My process as a swing trader is to have an area that triggers a stop. It can be a swing low, a trend line, a moving average or what ever you chose. If price trades below my stop trigger I then place a hard stop in the market below that bar. On a gap down I may reduce my time frame (Go from daily to hourly or less) to see what the market is doing. I'll then trail a stop until price stops moving in my direction. And I still get caught the odd time with a much bigger loss that I had planned.
%% REALLY?? I like to have them target my stops=profits. You did $ay stop losses so, i agree with that part. Actually they dont have to see your stops,$500, 501, 498, $505 are on any chart ,SPY market
%% YES; but i also like stops entered for all to see =profits also. SCHW is fair + honest, so i want them too see, my exits.[ EDIT one advantage of a resting order =gets hit plenty= of time, profit.] BUT a tight stop gets hit to much, for me