Enter the ES 10:00am at 1166 had stop at 1163.75, market went in my direction pulled stop up to break even, and at 10:30am got stopped out on that down spike. Was it my fault or the MM's trying to run my little o stop? I'm talking on a 5 min chart so you guys know. A: i should of took my profit at 1168.75 are due to how choppy the market is acting today or B: Leave my stop where it was at. I was trying to stick to my profit target 2-1 at the end of the day it's my fault.
Agreed. In fact, I would advocate not using a stop loss at all. But of course, everyone's system is different. To each his own.
not for the floor traders, my friend. many days they are who move the market and electronic traders follow them. They are very well aware of the stop areas. They know where the congestion area of stop orders is and they do go after it, or defend it if they can. today is a good example. stop orders above 1168 and below 1162. they were very well defended. BUT this subject should not have any thing to do with your trading, you need to calculate your risk and place your stops orders, regardless where it falls. lack of discipline is why many of us fail. good day
How do floor traders have any power to do that on the s&p? The screens completely dominate the volume. Plus its an index which will obviously be arbed. I can't understand how that could happen.
And take it a step further. All those stops are a few ticks outside the swing high or low. They might be stops to close a losing position or stops to open a new position for a potential breakout trade, but the point is they're stop orders, which turn into market orders once they're triggered. When a whole bunch of traders' stop orders are triggered around the same price zone and become market orders it drives price up or down accordingly. If the breakout occurs on decent volume, the breakout is valid and the losers are protected from greater losses and the new positions take advantage of a profitable breakout. But if the breakout simply occurs because a bunch of stop orders became market orders just outside an S/R zone and there's no serious buying or selling interest to create follow through, then you have a failed breakout, and the traders whose stops closed out losing positions there will feel as if their stop was "run" or "hunted" just to screw them. A failed breakout is a good reversal signal, so the losers can get right back into their trade, and take advantage of the breakout traders who are trapped and now THEIR stops will be triggered in the other direction.
Wow, this is getting rich. What do you think "locals" do all day? What do you think they've done for the last century+? Specialists (and MM's) aren't the only one's that have purchased seats. When hard stops cluster, they're identified prey, and ultimatly taken out. Particularly just below (or above) round numbers. When long, a chandelier stop, HHV since you've owned it minus 3 ATR is a good little tool. Then you just re-enter into something else (rather than dwell on it). Some would call it emotional detachment. Others call it preservation of capital.
So whats the solution? To use much bigger stops?? If everyone puts there stops just above/below the last swing high/low, and the market moves to stop them out and then turn, then the market would never go anywhere and would always be in a range would it not???
+1 I will use a stop loss (or a trail) once the trade is profitable....but to enter a trade with (for example) a fixed or tight stop loss is just looking for trouble in my book. I have learned (painfully) to give the trade time to develop and not be focussed on 'instant profitability.' Otherwise, I just end up paying the broker, and that's no fun. But I agree there may be 'games' done to 'run stops' --- IMHO that's frequently found with tons of long-tailed candles in a row. That said, I used to have a 5-point ES stop on all trades when I placed the order, which I kept purely for 'catastrophic' purposes if my network or computer crashed ... that's a tip I picked up from the guy who runs the room I trade in. But nowdays, I find myself not even doing that, and prefer to use more 'mental' or 'time-based' (though still mental) stops and manage my trade accordingly based on market conditions.