Question about stop targeting
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Thread: Question about stop targeting

  1. #1

    Question about stop targeting

    I read in Kathy Lien's book on FX and other sources that London traders take out stops before they start the major tendency of the afternoon. I dont understand why stops have to be removed prior to the major intraday starts. Can it be because the open positions early in the semester stop the real intraday trend from happening?
    Why not start the real move early in the session and just trigger stops on a single side of the market. I say this b/c stop hunting tries to target both long and short. Isnt this a waste of time? Im clueless.

  2. #2
    Remember, this is a global market with professionals who are agreeing to upcomming reports, political situations, pre-dawn trading, etc.. In the futures industry these traders are known as the Locals who supply the liquidity in the market for the off-floor trader. In 4x they are the also known as the desk traders. To is quit running. You've got an entry order, or a exit-loss order, out intra-day trading ranges, and when the market is thin out of normal market hours, the bid/ask is run up to/down to your stop price. Their intention is usually to scalp this place provided by you taking another hand; not affectionate what-so-ever the market direction. Your order simply allowed the local a way into the market. Example - When the local scalped a 10 lot commerce intra-market against the daily trend, and you were the other side of this commerce, AND his profit objective was ONLY 10 PIPs a lot on a normal account, you allowed him a signifigant profit for him to conduct your stop within very short time frames. He left for this profit while you had been abandoned inside this trade potentially to set a new exit (negative) price point exit, or lick the consequences of your own stop-loss order that has been conducted,and now 30 min later the market is running at the direction of your initial trade.

    Please be careful out there. Depending upon who introduces you to trading 4x, or futures for that mater, there are many secrets to the business enterprise. The retail client has to be quite informed and confident their trading platform before exposing real capital to the market place.

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