First of all, I'd like to say, I'm not an elite trader. I'm a retard trader. So there's that. I've been lying the whole time.
Stops push the Market lower? The books mention floor traders would push price to clean out stops. Can you elaborate further?
Thank you for your time. Ok so since stop losses are orders waiting to be filled, and the market is constantly filling orders, does putting a stop loss in any way, assist to move prices? (obviously in the direction of the stop loss)
The markets generally tend to move in what ever method brings the most pain. This is independent of market sentiment. You could have the most bullish market belief ever by 99% of the public, but if there is a lot of levered up LONGs, they will get hit first, and hardest. Again, it doesn't matter what your sentiment is; when the first margin-calls go out, everything else under that collapses in unison. If the market can punish shorts even greater, then that is where it will migrate to. This is not a belief of Murphy's law... if you think about it, it makes sense.
I doubt it. Must of the volume is bots which are on both sides, cancelling and re entering millions of orders all day long. I don't think there is a magical vacuum to trip stops even though it may seem like that sometimes
add in the voice that goes "what do you think youre doing trying to make money off of these people's hard work?"
Do you feel guilty making money off trading or shorting? I battled that mindset with family and friends. Some were furious I was gambling on the upside and taking their hard earned money by shorting. Eventually you will avoid telling anyone you trade because the conversations go nowhere quick.
Markets tend to move towards large accumulations of orders. If there is a large volume of sell orders above the market it makes sense there will be more buy orders where the market is actually trading; therefore, the market will move higher because there are more buyers than sellers. Once those sell orders are hit the market will start to fall because the buy orders are now down below and the market will move towards those orders.This repeats many many times throughout the day. Novice traders often put their stops one tick above or below a particular point, never considering for a second the logic of that, so their stops are frequently hit. They blame government conspiracies or the Federal Reserve or bots going after their stops: not true of course. If they were to ask themselves the question: why is that point there and why did the market hit their stop and then immediately reverse? The answer might be useful.