Выбрать страницу

Many retail Forex traders are concerned about stop-loss hunting because they are virtually powerless as individuals to defend themselves the powerful «hunters». In this short article, I’ll explain to you what stop-loss hunting is, and how you can avoid being prey to it.

What Is Stop-Loss Hunting?

Basically, stop-loss hunting is a trading strategy that tries to force retail traders (like you and me) out of our positions by driving the market price to a level where our stop-loss levels are placed. This is a strategy that the investment banks and hedge fund managers adopt because they have the resources to do it.

Simply put, the big financial institutions buy (or sell) a large amount of currency that causes the market price to go up (or down), hitting the retail traders’ stop-loss levels, and causing us to exit the market at a loss. In the meantime, they will gain from our losses.

How Do They Know Where Our Stop-Loss Levels Are Placed?
Usually, this happens when there is an obvious support or resistance line on the trading charts. With a clearly defined resistance level for example, institutional traders will know that many retail traders will place their stop-loss trigger just a few pips above the resistance line.

Your trading brokers will also know exactly where your stop-loss triggers are placed. After all, they provided you with the trading platform, didn’t they? Whenever you place a stop-loss order on your trading platform, the information will be relayed back to the broker, and he will know your exact stop-loss price.

Прочтите также:  Обзор: Форекс обучение - основные стратегии, технический анализ и методы управления рисками #ТорговыеСтратегииФорекс2016

It’s hardly fair game, huh? The odds of profitable trading are highly stacked against you. That’s why you’ll need to fully understand the risks of trading, and how to avoid them.

Source by Harold Hsu

Связанные записи

  • Trend Forex 2.0 — Manual Forex Trading System The most important part of any Forex trading system is proof that it works. Who would want to waste their time and money learning and implementing a strategy that only incurs losses? And […]
  • Importance of Back-testing in Trading There are many indicators that can to be used for as a tool for trading, namely RSI, MACD, Stochastics, Bollingerband etc. Some traders have their own favourite indicator which they think […]
  • Tactics to Make Money Off the Forex Market Trading The Forex Market can be a lucrative way to make money if you have a firm understanding of what you are doing. The Foreign Exchange Currency Market also known as FOREX, is one of […]
  • Forex Trade Signal Based on Forex Double Top or Bottom Formation To describe double top or we can use a term used in technical analysis to showing the rise or of a price,a drop,another rise to the same level as the original rise,and finally another […]