Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

simterann22

Getting Stopped Out Before My Stop Level

Recommended Posts

Hi all,

 

I am VERY new to Forex. I have been trading futures but like to play Forex on my sim account at present....and I love it if only I can break this problem.

 

Anyway....I've been setting up bracket trades around congestion and pivot points to capture breakouts. I found I was getting my stops hit prematurely so I increased my buffer by making my stops further out. Still no luck. So what 'they' do is get me in the trade, charge me at an inflated market price then it goes against me! ARGGGGH!

 

You will see in the attachments on a GBPCHF trade that my stop was set at 1.75660 but the price never exceeded 1.75610. Huh?

 

Is this because of the spread (which I'm still not fully aware of or is it the way I'm setting up my trades?

 

Thanks a lot.

5aa70eef619fa_GBPCHFtrade.thumb.jpg.51d04731ca04122fef36496f38dac746.jpg

5aa70eef682fd_GBPCHFTradeChart.thumb.png.b99dee692f1df990fd41b58fc383e68b.png

Share this post


Link to post
Share on other sites
Hi all,

 

I am VERY new to Forex. I have been trading futures but like to play Forex on my sim account at present....and I love it if only I can break this problem.

 

Anyway....I've been setting up bracket trades around congestion and pivot points to capture breakouts. I found I was getting my stops hit prematurely so I increased my buffer by making my stops further out. Still no luck. So what 'they' do is get me in the trade, charge me at an inflated market price then it goes against me! ARGGGGH!

 

You will see in the attachments on a GBPCHF trade that my stop was set at 1.75660 but the price never exceeded 1.75610. Huh?

 

Is this because of the spread (which I'm still not fully aware of or is it the way I'm setting up my trades?

 

Thanks a lot.

 

Yes, it is the spread. If you are short with a bucket shop, then once your stop appears as the offer, you will be filled. You are trading in the example the GBPCHF, which tends to have one of the larger spreads. For bucket shop trading, you are often better off adding the spread to your stop loss.

 

Best Wishes,

 

Thales

Share this post


Link to post
Share on other sites

there are 2 types of stops:

 

1. catastrophic stop -- a "wide" stop used to protect against black swan events.

 

2. operational stop -- a tight stop used to protect against:

 

a) wrong analysis

 

b) market direction changed after entry

Share this post


Link to post
Share on other sites

You will see in the attachments on a GBPCHF trade that my stop was set at 1.75660 but the price never exceeded 1.75610. Huh?

 

Is this because of the spread ...?

 

Trade the Currency Futures and you won't have this problem. Your bucket shop will move the market to take out your hard stop unless it is really wide.

Share this post


Link to post
Share on other sites

Trading a wide spread market off a 5 min chart is the road to ruin for a spot FX beginner in my opinion (and experience :)). Take it up to the 4h or daily for those types or markets. Also be aware that fixed spread spot FX dealers are usually bucket shops and will trigger "market spikes", especially on volatile currencies, to trigger clusters of stops.

 

my 2 cents. Good luck.

Share this post


Link to post
Share on other sites
Trading a wide spread market off a 5 min chart is the road to ruin for a spot FX beginner in my opinion (and experience :)). Take it up to the 4h or daily for those types or markets. Also be aware that fixed spread spot FX dealers are usually bucket shops and will trigger "market spikes", especially on volatile currencies, to trigger clusters of stops.

 

my 2 cents. Good luck.

 

I quite agree...... the faster time frames can spell disaster for even the most experienced traders.....

 

The 240 minute chart will allow time for detailed analysis and then entry can be made on a faster chart such as 60 minutes....

 

Too often we get to thinking that a fast chart will yield easy money quickly and the result is often the opposite.

 

This I have learned and relearned several times from experience......:doh:

Share this post


Link to post
Share on other sites
Trading a wide spread market off a 5 min chart is the road to ruin for a spot FX beginner in my opinion (and experience :)). Take it up to the 4h or daily for those types or markets. Also be aware that fixed spread spot FX dealers are usually bucket shops and will trigger "market spikes", especially on volatile currencies, to trigger clusters of stops.

 

my 2 cents. Good luck.

 

If you are trading off S/R, then time frame should be irrelevant for the intraday trader, or nearly so. If you are trading the EURUSD and price develops support at 1.3900, then that support will be identifiable on a 1 minute, 5 minute, 15 minute or 240 minute time frame.

 

If you are trading S/R, then your stop must be placed below support for a long position and above resistance for a short trade. The wide and variable spread does need to be taken into account, as all it takes for your stop to trigger is that the stop price appear as the bid (for a sell stop) or as the ask (for a buy stop). This is what takes folks out of their positions without price actually having traded at that price outside of the firm (and without that transaction being printed on the "tape," so to speak.

 

To compensate for the spread, my daughter typically places her stop at a point twice the size of hte average spread beyond support or resistance. If she is at her computer when price gets near the stop, she will exit on a market order if she sees price actually trade at or beyond her "ideal" stop loss; and if she is away fromthe computer, her stop will be executed, but her loss will be a tick or two or three larger than it would be in a 1 tick spread market. This small additional loss she calls "slippage."

 

As far as the spikes are concerned, again, proper identification of support and resistance, and placing your stop safely beyond those levels should keep you from being shaken out of your position unduly.

 

 

Best Wishes,

 

Thales

Share this post


Link to post
Share on other sites
I will be interested to see your daughter start to post, I am sure her thread will be of great interest as she starts to show up the experienced traders......

 

I don't know that I'll let her post anytime soon.

 

I do let her read my posts here, as well as some of the other participants posts after I have previewed them (she is a fan of DbPhoenix, although this may have more to do with his avatar than his posts; and she does enjoy his blog), and I did register a user name for her here at the forum.

 

However, I have obvious concerns about allowing her actively to post on any internet forum, let alone one where the other particpants are nearly 100% adult males.

 

As far as her trading goes, she has been showing me up lately.

 

Best Wishes,

 

Thales

Share this post


Link to post
Share on other sites

I think its great that she seems to be in tune with price at her age.....(and I well understand your concerns re posting)

 

I know that she has probably received some advice from her Dad, but I have an idea that she may be on her own for decision time...... I quite admire that you have exposed her to the markets..!

Share this post


Link to post
Share on other sites
I think its great that she seems to be in tune with price at her age.....(and I well understand your concerns re posting)

 

I know that she has probably received some advice from her Dad, but I have an idea that she may be on her own for decision time...... I quite admire that you have exposed her to the markets..!

 

This morning she was sitting at her computer watching her charts (the first thing she does when she gets up is turn on her computer and open her charts - she is usually in the office before me). I knew she wasn't going to trade this morning, becasue she was going out to a movie with my wife and our other children. Next thing I know, I see her entering an order. "What are you doing," I said.

 

"I'm entering an order to sell the EuroYen."

 

"I thought you were going to the movies."

 

"I am," she said, "don't worry, I'm entering an automatic stop loss and a take profit order too."

 

"What happens if you were to get stopped in while you are out but price doesn't reach your profit target before reversing?" I said.

 

She laughed and said, "Why wouldn't it? Of course it will hit the target, look at the chart, there's nothing to stop it!"

 

Well, she is still at the movies, but I see that she also has made a nearly 100 tick profit on her EURJPY short and she is out of the market.

 

They say that people learn foriegn languages better if introduced to them at a young age. Perhaps learning to read price is no different. But I have a feeling that much of her success is that she is psychologically immune at this stage of her life from the fear of loss that cripples so many from doing well at trading. Also, she has a lot of confidence in what she is doing, because her daddy taught her. I could teach an adult trader, with whom I have no prior relationship of trust, the same way I taught her, but he would likely still desire the "security" or "confidence" that is sought in "confirming indicators."

 

Who knows? She is having a blast, and her momma and her pop pop (a long time trader himself) are getting the biggest kick out how well she is doing.

 

As for me, I am as proud of her as I could be, but then again, I have been proud of her from the first I saw her.

Share this post


Link to post
Share on other sites

Not sure if this was mentioned yet, but the 'market price' in forex is the change in the bid and not actual trades.

 

So where a stop is located and maybe not hit is because maybe the bid has only moved to there and not trades themselves.

Share this post


Link to post
Share on other sites

But I have a feeling that much of her success is that she is psychologically immune at this stage of her life from the fear of loss that cripples so many from doing well at trading.

 

I think most traders start out like that regardless of age. It is quite possible that kids are better able to deal with setbacks too, and that it is over time with various pressures to perform that we develop mechanisms and emotional reactions that don't really serve traders well. And kids are probably not too encumbered with all the notions of financial security, wealth and avoiding risking what most have to work long and hard to gain.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 26th November 2024. Trump’s tariff threats boosted Dollar; Peso, Loonie, Gold & Oil Lower. The Trump trade picked up steam as investors cheered his pick for Treasury Secretary, Scott Bessent. Beliefs he will be a steadying voice in the administration’s fiscal measures, while still following President-elect Trump’s tariff and tax commitments, underpinned. Asia & European Sessions:   Trump threatened on Monday to impose sweeping new tariffs on China, Canada and Mexico on his first day as US President to crack down on illegal immigration and drugs. He would impose a 25% tax on all products entering the country from Canada and Mexico, and an additional 10% tariff on goods from China as one of his first acts as president of the US. Bessent’s 3-3-3 plan aims to cut the deficit to 3% of GDP, boost growth to 3%, and increase oil production to 3 mln barrels. Treasury yields dove in a curve flattener, extending their drops through the session, on expectations inflation will decelerate. A strong 2-year auction also supported. The Dow led the charge, climbing 0.99% to 44,736, a new record peak as the rally broadens. The S&P500 climbed to 6020, a session peak, but finished with a 0.3% gain to 5987. The NASDAQ closed 0.27% higher. Today, stock markets in Europe are posting broad losses, with the DAX down -0.6%, the FTSE 100 0.4%, after a largely weaker close across Asia. ECB: Lane suggests ECB must be open-minded on speed of rate cuts. The ECB’s Chief Economist said in a speech on Monday evening that “remaining open-minded about the speed and scale of adjustments is in fact a valuable strategy across various environments, as different situations may necessitate distinct approaches.” This careful, step-by-step strategy enables us to observe the responses of the economy to our decisions and continuously refine our understanding of their impacts.” The comments leave the door open to a 50 bp move in December, but also tie in with our expectation that the central bank will deliver a 25 bp while tweaking the forward guidance and commit to additional moves. Financial Markets Performance: The USDIndex hit a session high of 107.50 and is currently lower at 106.85. Mexican peso and Canadian dollar slumped as the dollar is being viewed as a haven after the comments of President-elect Donald Trump on tariffs on Canada, Mexico and China. USDCAD spiked to 1.4177 and USDMXN rallied to 20.74. Oil and Gold lost ground, in part on cooling geopolitical risks, and on Trump trades. Oil dropped -3.03% to $69.09 per barrel, in part on the Trump trade and on talk of a potential cease fire between Israel and Hezbollah. Similarly, gold fell -3.26% to $2605 per ounce. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • RYAM Rayonier Advanced Materials stock, nice trend with a pull back to 8.79 support area, bullish indicators at https://stockconsultant.com/?RYAM
    • LICY Li-Cycle stock watch, attempting to move higher off the 2.15 triple+ support area at https://stockconsultant.com/?LICY
    • SGMO Sangamo Therapeutics stock watch, pull back to 2 support area with high trade quality at https://stockconsultant.com/?SGMO
    • YUMC Yum China stock watch, pull back to 47.4 support area with bullish indicators at https://stockconsultant.com/?YUMC
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.