I placed a trade today in the mini-dow using td ameritrade's TOS platform. 10 minutes later, at the market open, my stop got hit. It didnt go past my stop. It hit my stop, dead square in the face. Then eventually the move went in my intended direction. I feel its a total scam. I know I'm not the only one who has had this happen to them, but it just pisses me off, and makes me wonder if trading is a total scam, and rigged. I felt maybe it has something to do with TD Ameritrade, and if I went to a different broker I could've had different results?
Assuming you are talking about futures and not forex...
Futures are regulated. It means if your stop was the day low or day high in ThinkOrSwim, then it was the day low or high everywhere in every platform and every brokerage.
Most inexperienced users place stops in common places, so it is natural for the market to drift towards these areas to take out the weaker hands, then to continue in the original direction after doing so.
What product did you trade? Were you long or short? What was your exact stop price?
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A buy stop order says "buy X contracts/shares" when the market trades this price (or on some exchanges, when the price is quoted, not necessarily traded). The market traded that price, and your stop was triggered. If you had put the order one tick higher, then it would not have triggered (in other words, your tiny stop order is irrelevant and does not influence the market in any way), and you would be happy and feeling like the market is wonderful. Said another way, your feelings about it being a scam or about it being great are all feelings you yourself create and nurture.
There are 3 lessons I can think of that can be learned here:
1) Don't place a short trade in a dow market that is up overnight 60 points ten minutes before the open. Markets function as a two-way auction, and the market determines buying and selling interest by probing. If it's up 60 points and trading at overnight highs, then there is a good chance that at the cash open the market will probe higher to auction for sellers, since it has not found enough to stop the upward auction. So, you can bet that a probe upward is at least a possibility (though the S&P did not break the overnight high, for example).
2) The market is not a scam, because a scam is usually accompanied by false promises. The market makes no promises, and does not force you to enter, exit, or do anything. People who have a lot of capital move markets, and they throw their size around in order to make profit. They purposely move the market above resistance, knowing that the newbie has his stop just above it, and below support, knowing that stops are there to be executed. This allows them to make profit; they do this because they can, and because it is profitable. It's not a fairy tale or conspiracy; it's what anyone would do if they had the money and means to do so. It's not evil, but it is what it is. Knowing this can give you a large advantage. They are simply playing on the psychology of traders, because a market is simply a psychological structure with money and price used to keep score. So, you can either be pissed that it does not always work for you, or you can play the game by the rules of those who run the game.
3) Trade with sim money only at this point, or experience more pain. Remember, you choose how much to lose or make, and at this point you are clearly not ready to trade real money, so only trade real money you are happy to part with.
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It happens to all of us ctmvas. The 'trick' is to accept your stop being hit was a random market event and not to take it personally. As long as you followed your trading plan, I assume you have one, then you did all you can do. The market controls what happens after you enter a trade, every outcome is a unique event over which you have no control, that is one constant that will never change. The best any of us can do is keep a clear head, stick to the plan, and let the market take care of the outcomes.
Lot of wisdom in that statement Josh.
Last edited by trendwaves; January 11th, 2013 at 12:19 AM.
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