Has anybody had a similar experience to this! I attempt to trade the Australian Share Price Index and through a particular brokerage firm and no matter where I placed my stop loss order, ie, near or far, the market would always reverse and trade exactly to my stop, not a point above or a point below, knock me out of the trade and then reverse again and continue on its merry way. I started to smell a rat and promptly changed brokerage firms. don't know if this will do the trick as yet but would like to hear from anybody who has experienced a similar problem and what you did about it. regards, Averenajoe.
Placing stop loss orders with a broker might invite stop hunting. Mental stops might avoid some of the problem. Whipsaws can happen anytime.
I have always said that only people who want to get stopped out use stops. In my not so humble opinion, I believe that you should set aside a dollar amount that you are willing to lose on a trade and start with a position size that affords you an ample amount of room to withstand a correction or to be proven wrong. When the trade starts to move in your favor then start to build a larger position thus switching from using your wallet (pincushion) to using your profit-cushion. Think outside the box, listen to yourself and not what experts say you should do, and beat these guys at their own game. Best wishes -MO
The only way that that will happen is if your starting position size is too large. What if you had a thousand dollar account and went long one micro without using a stop? At some point your analysis tells you that you are wrong and you click out of the trade. Now let us say that the chart proved your analysis correct by moving up and you are sitting with a profit. You could then double your position, setting an average price, and risk your profit. If price continues upwards you could add just enough to raise your average price just below a support line. At some point you are going to be making some very nice per pip gains. Your risk in the beginning with zero leverage and no stop was insignificant but the reward potential keeps growing as you grow your position size under the trend. A stop loss doesn't protect your account as much as proper planning, position sizing, and knowing when you are wrong.