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Retail stop orders being leaked to HFT internalizer firms

  #7 (permalink)

Curitiba, Brazil
Trading Experience: Intermediate
Platform: ProfitChart Pro
Broker/Data: CM Capital
Favorite Futures: DOL, WDO
AMGT's Avatar
Posts: 43 since Aug 2015
Thanks: 59 given, 35 received

Let me see if I got this straight.

He had a stop order at a given level. This stop was triggered. Turns out who took the other side of his order was a HFT firm.

For me, this seems perfectly normal. Someone MUST take the other side of his order, otherwise, he wouldn't get a fill. Just because it was a firm known for using HFT doesn't mean anything. Could be his neighbor, sitting right across the street. Would he then claim his neighbor knew where his stop was and "hunted him down"?

Another thing, most retail (and some institutional) traders have the habit of placing the stop a tick or two below the last low (or above the last high when short). Doesn't take any "rocket science" to figure it out and actually profit from these orders being triggered for a quick scalp... Some levels are so "obvious stop levels" that no "leakage" is needed to figure out where a great number of stop orders will be.

I don't really think that there are HFT firms out there "conspiring to take out the retail traders stops". Smells like rubbish talk to me...