Stop Hunts - Are they really what the name entails? Or is there more to them? - Emini Index Futures Trading | futures io social day trading
futures io futures trading


Stop Hunts - Are they really what the name entails? Or is there more to them?
Updated: Views / Replies:3,304 / 70
Created: by JMoniker Attachments:11

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 100,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

 
 11  
 
Thread Tools
 

Stop Hunts - Are they really what the name entails? Or is there more to them?

 
You did what?!
Indianoplace, IN
 
Trading Experience: Intermediate
Platform: SierraChart
Broker/Data: CQG
Favorite Futures: 6E, NQ
 
Rrrracer's Avatar
 
Posts: 1,587 since Feb 2017
Thanks: 9,111 given, 5,465 received
Forum Reputation: Legendary

@Leon of Pizza, do you have a link for this webinar? I'm a big Dalio fan, couldn't find it here.. thanks

 
 
Elite Member
Pahrump, NV
 
Trading Experience: Intermediate
Platform: Sierra Chart
Broker/Data: Infinity Futures
Favorite Futures: ES, NQ, CL
 
Posts: 11 since Aug 2016
Thanks: 0 given, 9 received

Stop hunts


tpredictor View Post
Yes, there are stop hunts. I see it not as just one group of traders but all traders actively hunting stops.

As for actual stop runs, this type of activity can be caused by a few different types of activity. One type of activity is when the liquidity providers pull liquidity from the book. These are forced runs. However, it can also be caused by unstable dynamics because too many short term speculators make the same prediction. It can also be caused by aggressive HFT (and momentum speculators) driving prices near highs or lows. It is often a combination of HFT seeking only a tick or two and retail traders. And, then there are also program buys and sells. In the ES, program buying is often trigger to occur on new highs or lows. Most of the time the big rallies are caused by short term speculators getting wrong sided when program buys/sells go off near lows/highs. Many trading dynamics are caused by differences in leverage.

As for what you could do, you could have re-entered more aggressively. Tighter stops tend to favor more aggressive trading. The very big risk with more aggressive style of trading though is having a run of serially correlated losers. So, you need to either switch sides or have something like 2 try rule.

Right as for double bottoms. The first bottom stops out the long speculators and the second one gets everyone short which is why they are can be so powerful. Most of the really big suspect stop runs in the ES are historically designed to stop out shorts. But yes, they do happen.

Most stop runs also occur during lower liquidity periods, i.e. overnight. One way this manipulation can occur is if a liquidity provider controls enough liquidity both sides of the market. They wait until speculators get long sided then pull the resting orders. At same time, they may post large size in the book to signal to HFT to short/sell into their zone. These large orders are programmed to generally be 1 tick in front of retail traders targets.

The other side to the stop run or vacuum effect. I have thought about this too is a dynamic caused by momentum and value buyer dynamic. Momentum buyers drive price away from value. It becomes a risk to a liquidity provider to keep bidding the market because the momentum buyer can then dump out on the liquidity provider if they keep backfill. So, in lower liquidity markets you can sometimes see the backfill risk dynamic at work.

As for your particular incident, I haven't checked anything specific to that event and others may have better explanation.

Absolutely correct. Market makers know where people's stops are - most people put them at the swing low and they know that. Also, when you see the market going up and see clusters of sell orders below the current market price, there's where people's stops are. Bingo! This is liquidity, and the algos are trained to go towards that liquidity. That 's why you'll see the market reverse if those orders are canceled before price gets there - the algos go "oops, where's the liquidity?" You have to pay attention to the DOM/LOB to see where concentrations of resting orders are to figure out what's going on.

I have a friend who trades without stops for that very reason. Maybe a better strategy would be to front-run the stop hunt by placing your buy order a few ticks above those large resting orders.

When price gets too far above or below value, it will tend to swing back into the value area. Price oscillating around POC isn't unusual at all.

In essence, your analysis is spot on. An institutional trader, maybe?

The following user says Thank You to n7ekg for this post:
 
 
Elite Member
Green Bay, WI
 
Trading Experience: Intermediate
Platform: Ninja Trader
Favorite Futures: NQ
 
Scottiep's Avatar
 
Posts: 66 since Aug 2011
Thanks: 26 given, 13 received

sTOP hUNTS


Like so many aspects of trading, the very best setups often go awry. No indicators identify where the orders actually are, prompting buying or selling. Only 3-5% of Retail (small) day traders- futures, options, stocks/etfs- make many, so knowing that reinforces something I've learned the hard way for 11 year: 95-97% of all retail/small traders lose money. Our indicators just don't identify where the orders are to refute, or reinforce, the best setups, like an inverse H&S. If anyone in futures.io world feels there is a way for 'us little guys' to trade and make $50k a year, or more. I would greatly appreciate the opportunity to eat humble pie and learn any techniques, indies or templates that actually work. Your analysis is what I have noticed over 11 years: nothing works consistently enough to make even a very modest income. Please, any successful traders out there, if you have any method that works- consistently- even if it is just scalping at high percentage wins- share this with us. I'd love to try trading futures again, but I have not found a 'winning formula/method'. Thank you. Scottiep

The following 2 users say Thank You to Scottiep for this post:
 
 
Trading Apprentice
Helsinki
 
Trading Experience: Beginner
Platform: Metatrader
Favorite Futures: Nasdaq 100
 
Posts: 8 since Dec 2018
Thanks: 1 given, 4 received

Quess

Thank you for your very fun writing, but nevertheless for a naturally serious subject. Indeed, on some days, it seems that the market is quite a fool and makes some special stuff that really has nothing to do with any of the methods you have already learned. Try to look at where the big boys are going and try to move different levels of support and draw trend lines, but nevertheless or maybe that's why everything goes exactly the same day. The only thing you can try to do is follow just what the market is telling you at a given moment, everything else is just an enlightened guess about what might happen next. Of course, you can improve your success rates by using different casting based analyzes, but, despite all the great tools, it is ultimately only about what the market is doing and you can't be right every time.

The following user says Thank You to Samip for this post:
 
 
Trading Apprentice
Baton Rouge, LA USA
 
Trading Experience: None
Platform: thinkorswim
Broker/Data: TDAmeritrade
Favorite Futures: I trade options on equities and ETF's
 
Posts: 4 since Aug 2017
Thanks: 27 given, 0 received

Put the shoe on your foot

The only way to uiderstand the situation is to put yourself in their shoes. If the only way you are going to make money is by your clients losing money then you've got to be wicked. Your boker can see exactly where everyone's stops are. If YOU were the broker what would you do? You see 2,000 stops on long positions and price is rising. You'd flash drop the price to stop 2,000 accounts out, then as price is rising again a flash buy is inititated one penny above your collective stops and the broker receives the profit from the buy point and the point where the flash up again ends. Sweet huh?

Why didn't you just get back in the position?

 
 
Hi Mom!
Bridgeport, Ct
 
Trading Experience: Intermediate
Platform: Sierra
Broker/Data: IB/Sierra
Favorite Futures: Oil, Nat Gas, ES
 
TheShrike's Avatar
 
Posts: 467 since Jun 2012
Thanks: 1,243 given, 690 received


centaurer View Post
This is forgetting though that an index future can only stray so far from the cash index without being spread back in line.

The entire $ value of the retail traders is just absolutely nothing.
It can't be a profitable strategy for even the biggest hedge fund to try to take out retail trading stops on an index future because other hedge funds would just take them to the cleaners.

I also imagine if you can visualize all the stops they are highly symmetric up and down because there are hundreds of thousands of trading decisions being made with different motivations and time frames. Most aren't even on the book anyway. Any decision being made that is trading large enough to have a market impact is not going to have just a single price point that dumps on the market as if they are a retail trader.

To me this is a clear example of anthropomorphising the market and in doing so it distorts the view of what is actually going on.

There are not dark forces hunting retail trader stops. It was just a losing trade. Next trade..

This guy understands. There is no "they". The Market Makers aren't out to get you. Institutions don't care about you. HFT algos aren't hunting your 1 lot, and the DOM lies. They aren't going to deploy hundreds of millions of dollars to drive the price down to grab retail orders at a pivot to get a "cheaper price". You are completely immaterial to them. Also, Santa and the tooth fairy don't exist. The reason they don't care is because all of the retail volume added together doesn't effect what they're trying to do in the least. Does an elephant care about a fly? Stop reading too much into it. You're simply looking at price under a microscope and your stop was hit by the normal noise in the market.

The following user says Thank You to TheShrike for this post:
 
 
Elite Member
Akron Ohio
 
Trading Experience: Advanced
Platform: Sierra
Favorite Futures: Emini ES
 
Posts: 2 since Nov 2018
Thanks: 0 given, 1 received


JMoniker View Post
Today during Globex I saw it setting up for an inverse H&S on the 15 minute chart. I'm still new and thought okay, I know this one! So I go long near the head. It starts to make the shoulder and I'm excited. Here we go! Blast off! I'm going to have SUCH a nice steak this weekend y'all don't even know! Then sometime between 10:15-10:20, it literally plummets within a microsecond (it's that doji you can see before the rally). That doji's bottom literally took less than a second before instantly snapping back up. Four points in the blink of an eye. It came down so quick I closed my position. Then it proceeded to go up thirty points for the rest of the day. I was so stunned I couldn't take another long entry. Through teary eyes I watched it rally higher and higher as "Hurt" by Johnny Cash played on my speakers.

I know naturally I'd roll my eyes and say "there's that crap they do again". But I was wondering if some of the more experienced traders can offer some insight on it. Did they do all that just to "test" 2562? That's a test? A test for whom? Themselves? By "they and them" I'm of course referring to whatever imaginary enemy I envision to be the culprit behind these stop runs. I know the traditional advice is to have had my stop below 2560 but I just don't understand why they have to do that. I mean I guess I understand "why" but...is predatory intent really all there is to it? Same with some of the topping wicks later in the day. They were again millisecond whips I assume to take out any shorts before going down ANY way. Okay sure those topping wicks today align with some other insignificant wick from the prior day that was neither support nor resistance, which I'm sure also took a millisecond to make.

I can't help but wonder though...maybe there's something in footprint charts or something that would explain these moves. Like "oh that was just where a lot of sellers were". Something more technical than "it's a stop hunt". Or maybe those blink of an eye flashes are caused BECAUSE stop orders are being hit?

P.S - Usually when I ask a question here, someone always says "you don't know what you're doing, stop trading". Just help me. I just wanna learn that's all. You're better than me. I'm as sure of it as you are.


I haven't read all of the replies here, but what I read was good.

Consider this: what if you were able to enter after one of these stop hunts, liquidity sweeps, etc.? What would the Risk/Reward profile look like? IMHO, these stop hunt events signals a big tell in the marketplace where a direction was attempted and then failed. You can build an entire business around identifying these events and then trading after they happen.

The following 3 users say Thank You to cmchugh39 for this post:
 
 
Hi Mom!
Bridgeport, Ct
 
Trading Experience: Intermediate
Platform: Sierra
Broker/Data: IB/Sierra
Favorite Futures: Oil, Nat Gas, ES
 
TheShrike's Avatar
 
Posts: 467 since Jun 2012
Thanks: 1,243 given, 690 received


piscesdragon323 View Post
The only way to uiderstand the situation is to put yourself in their shoes. If the only way you are going to make money is by your clients losing money then you've got to be wicked. Your boker can see exactly where everyone's stops are. If YOU were the broker what would you do? You see 2,000 stops on long positions and price is rising. You'd flash drop the price to stop 2,000 accounts out, then as price is rising again a flash buy is inititated one penny above your collective stops and the broker receives the profit from the buy point and the point where the flash up again ends. Sweet huh?

Why didn't you just get back in the position?

Sorry, but this is not reality. Brokers serve to broker transactions. They don't care what happens. They want you to live as long as possible to make as many transactions as possible.

The following user says Thank You to TheShrike for this post:
 
 
Elite Member
knoxville tennessee usa
 
Trading Experience: Advanced
Platform: nijia trader
Broker/Data: A.M.P. I.Q. ....C.Q.G.
Favorite Futures: ym
 
Posts: 507 since Mar 2012
Thanks: 101 given, 232 received

stop hunting

well yes and no. 80% plus of the trading volume are blots. may be more. are they hunting your one or two lot stop losses . not likely. i used to think so after i got mine clipped like you did. the stops that are being hunted are the ones of swing traders and hedge funds . those stops are bigger and will mover the market a larger distance when triggered. and example when the market brakes the 50 or 200 moving averages with volume you see a big and sudden move down . some bigger players are selling there. on a daily chart .

 
 
Elite Member
phx AZ US
 
Trading Experience: Beginner
Platform: Esignal
Broker/Data: Infinity
Favorite Futures: es
 
tradersam's Avatar
 
Posts: 193 since Feb 2010
Thanks: 412 given, 245 received



Rrrracer View Post
LOL you had me laughing on that one man Sorry about the trade though, that sucks.

We get them in 6E fairly often but they're not typically violent moves unless there is a news announcement involved. Maybe it was a HFT/algo thing to hit like that?

They are prevalent in forex currency trading even more so than futures because most brokers are market makers, trade against their clients, can see all of their clients' account information, where their stops are, and can open the spread to grab them. Different and a much dirtier ploy than what you see in futures. Not saying that it happens all the time but... yeah... they're real lol. I don't think this is possible in a regulated futures exchange.

To push the market around, the big players need BIG size. What better way to get some easy ones than to engineer a run back to where stops are likely to be hiding (instant liquidity,) shake out the weak holders and take over their positions? If they can spend 25K volume in longs to get 50K in shorts, you better believe the possibility is on the table.

Most retail traders keep stops to protect against loss. These stop info is shared with big traders by most brokers as paid service. So if a trader has a large buy order then it makes sense that these be filled at lower price by all the sell stops. There is no guess work. The stops are there on their screens.

It is easy money and that is the motivation....not to cheat small traders ..they are collateral damage.
It is easy for a big trader to take money from small trader than to fight with equally big trader.

As small lot traders we need to know where we are in the food chain. Hint: It is not at the top...but more often at the bottom.We are the small fishes that feed of the left overs from the kill of the shark...sometimes we are food to the shark. If it happens too often then well most of us know what happens then...but never mind small fishes like us are entering market every day...some eat from the leftovers of the sharks but most also end up as food for the sharks.

You can practise your skills all day long, but it's comparatively easy to get better at playing. The hard thing is to get better at winning--anonymous
The following user says Thank You to tradersam for this post:

 



futures io > > > > Stop Hunts - Are they really what the name entails? Or is there more to them?
Thread Tools



Upcoming Webinars and Events (4:30PM ET unless noted)
 

Journal Challenge $1600 in Prizes & Free Journalytix for all participants!

February
 

3 Excellent Entries, and How To Automate Them w/Kevin Davey

Feb 21
 

The Driving Force Behind the Market w/Earn2Trade

Mar 5
 

TBA w/Stage5 & iSystems

Mar 12
 

TBA w/John Grady @ No BS Day Trading

Mar 19
 

Day Trading Oil Futures: Reducing Risk & Increasing Profits w/DTN IQFeed

Mar 26
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Problem Event Name: AppHangB1 Application Name: esignal.exe crudetrader eSignal 0 April 12th, 2015 06:07 PM
If there is a god - his name is George Friedman puma Off-Topic 0 January 28th, 2015 05:05 AM
Cutting The Deficit: They Wonít Because They Donít Have To Quick Summary News and Current Events 0 November 22nd, 2011 07:10 PM
The More Things Change, The More They Stay The Same tigertrader Off-Topic 0 October 8th, 2010 02:16 PM
Indicators, to have them or not to have them?! George Psychology and Money Management 11 September 6th, 2009 11:30 AM


Tags
5m_chart, 6e, aggressive trading, algo, algos, break-even, brokers, buy, currency trading, data, dax, doji, dow, el, footprint, forex, futures, globex, hft, index_futures, information, institutional, intraday, ladder, level 2, liquidity sweep, momentum, move the markets, orders, patterns, position sizing, position_sizing, price action, profitable, prop trading, quotes, resistance, s/r, scan, short, short term, spread, standing, stochastics, stock market, stop hunts, stop loss, support, switch, tf, tick, trading, trading plan, trend, type, volume, wicks, wyckoff

All times are GMT -4. The time now is 02:58 AM. (this page content is cached, log in for real-time version)

Copyright © 2019 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432 WhatsApp Business, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2019-02-20 in 0.15 seconds with 34 queries on phoenix