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Stop Hunts - Are they really what the name entails? Or is there more to them?
I know for a fact that these kind of transactions take place. whatever it takes to make money I guess ...
what is a successful trader?
maybe the ones that can read a chart, understand fundamentals or are good at predicting future price moves? could be, but I truly believe the most successful traders have good "connections". if you know who is buying/selling, how much and why, then you already have a pretty good edge. and sometimes you might even get some information about larger stops. (there're portfolio managers who actually put in a stop). of course you'll return the favor in whatever form that is
here's a good example: the stock xyz is trading around $102. now you have some information about a larger stop at $100. of course not visible in the order book. and below $100 the bid side is more or less empty. all you need to do now is selling the stock down to $100 and put in a bid. just make sure that there're enough shares from the stop to cover your short. you're not going to make millions, but still a nice trade with almost no risk.
conclusion:
I'm only aware of such transactions in stocks. in other markets like ES, I believe it would rather be difficult...
Stop Hunts, Re tests whatever you call them they do exist. I stead of looking at it as your enemy try to take advantage of it. It is not a bad idea at all to trade re tested highs and lows only. You will need a much faster time frame then 15 min though to make them visible. On the screenshot a "trade out of the book" on the NQ today. Look at the weakness (divergences) all over the place
It sounds like you have fallen pray to a market trap. Typically Novice traders get easily lured into these traps resulting in a quick move gainst the traped trader to to stop him out. Looks traps look like great trade ideas, but once trapped-in you will be proven wrong immediately - and this hurts a lot.
Stop hunts occur at specific price levels (mainly horizontal) of a chart at which Novices love to enter. The stop runs occur because traders put stops at more or less the same levels. Once there are obvious clusters, then they can be run over especially if the novice goes counter-trend.
Being a novice you will be trapped many times until you learn not falling anymore into the trap. However, it gets intersting once you can set the traps yourself!
Once you look beyond your pain, then this becomes a game you can choose to leave, participate or start to initiate yourself.
More reasons why I don't use stops, just get out when you're wrong. If you need something to protect yourself then use options, at least you won't be taken out in a liquidity sweep. So you could have bought a put, stayed long, and not been shaken out so you would have still been long for those 30+ points, but your put will lose value but not as fast/much as your profits so option hedging costs but at least you're not victimized by market shenanigans. Also, you're not guaranteed to be executed at your stop level, you could get filled at a worse level, especially if there are overnight gaps (stocks). Options are contracts to buy/sell at a specific price so they are a better guarantee.
is there evidence of this sharing in the futures market or something in the exchange's terms / legal agreement, or is this a conspiracy theory?? I'm referring to the futures market specifically. not FX.
It sounds like the method already resonates with you, so maybe the problem is psychological. I suspect that most traders experience more problems with execution than they experience with making their plans. Its certainly true for me. If your plans are showing a consistent positive expectancy, then don't alter them in any fundamental way. The underlying method should be kept static. This should ring true to you because you've already accepted that there are a multitude of methods being applied to a single market. That should lead to the acceptance that method selection is less important than the set of mechanics that you have to design for any particular method, which is what helps carry you through the execution phase.
With that said, see the attached pic for some suggested tweaks to your measuring tools.
So it's a conspiracy theory. If it were true, the clearing firm would be the party sharing info to other firms since they are like a central hub for multiple brokers.