Profitable Platform crashing - page 2

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cloudbreaker:

Don't disclose your stops to the broker. Set decoy stops in your orders and manage the real stops within your EA. Note however, that this introduces the need for high availability of your client platform.

This raises all sorts of questions. A broker is not going to manipulate the price in order to take out the stops of a single customer (unless your account is very large, in which case they will almost certainly not be warehousing your orders anyway).

Therefore, the broker will only spike the price if doing so is net-profitable across a group of customers. And that would appear to mean that the efficacy of decoy stops depends on a group effect, and cannot be significantly controlled by any action which you take individually. If most people aren't using decoy stops, then your (real) stop will get taken out by the broker manipulating the price in order to hunt the stops of other customers. If you're right about stop-hunting then, if there are lots of other customers with published stops around the level you want to get out, you're vulnerable to stop-hunting regardless of whether you use real stops or decoy stops.

Surely the answer is to use a broker who can't manipulate the price in this arbitrary way?
 
jjc:
This raises all sorts of questions. A broker is not going to manipulate the price in order to take out the stops of a single customer (unless your account is very large, in which case they will almost certainly not be warehousing your orders anyway).

Therefore, the broker will only spike the price if doing so is net-profitable across a group of customers. And that would appear to mean that the efficacy of decoy stops depends on a group effect, and cannot be significantly controlled by any action which you take individually. If most people aren't using decoy stops, then your (real) stop will get taken out by the broker manipulating the price in order to hunt the stops of other customers. If you're right about stop-hunting then, if there are lots of other customers with published stops around the level you want to get out, you're vulnerable to stop-hunting regardless of whether you use real stops or decoy stops.

Surely the answer is to use a broker who can't manipulate the price in this arbitrary way?
Thats ture, becuase stop hunting is successful when group of traders have stoploss in a particular range. the only thing to prevent stop hunting is not to use stop loss and be damn sure about your entry, or simply get a reliable broker with good reputation.
 
Jay007:
(...) the only thing to prevent stop hunting is not to use stop loss and be damn sure about your entry, or simply get a reliable broker with good reputation.
The former is extremely dangerous and will eventually lead to losses. The latter is my preferred solution. I have never seen any signs of 'stop hunting' with serious reputable brokers.
 

jjc wrote >>

Therefore, the broker will only spike the price if doing so is net-profitable across a group of customers (...)

This assumes all customers get the same stream of ticks. I have never had the time to fully investigate this, but I have seen some evidence to suggest that the answer is NO. But I can't prove or disprove my claim.

Don't get me wrong, I am not implying that they actually manipulate the ticks differently for different clients (as I said, I have never seen signs of 'Stop hunting' with big reputable brokers)... If clients might get different quote streams, it's due to technical reasons and not any malicious intent on the part of the broker.

 
gordon:

This assumes all customers get the same stream of ticks. I have never had the time to fully investigate this, but I have seen some evidence to suggest that the answer is NO. But I can't prove or disprove my claim.

There'll be some variation, obviously including clients on different types of account, but the broker isn't going to be sending a separate price feed to each individual client. (Decoy stops potentially do work without group activity if the broker can take out orders at stop without sending one or more ticks at the relevant price - i.e. if the OHLC shown retrospectively doesn't match the ticks received at the time.)
 
jjc:
(...) but the broker isn't going to be sending a separate price feed to each individual client.
That's my opinion as well. But what I'd like to know is - do they have the ability to do that? (probably not built-in to the server, but via some plug-in...).
 
gordon:
That's my opinion as well. But what I'd like to know is - do they have the ability to do that? (probably not built-in to the server, but via some plug-in...).
It's definitely theoretically possible, but I'd imagine that the processing and also administrative requirements would just be too horrible. Worth remembering that (some) brokers warehouse orders simply because most punters lose money, and therefore it's worth betting against them. Things like stop-hunting are just icing on the cake; it doesn't make the difference between profit and loss for the majority of customers. They'd lose money anyway.
 

Gordon and jjc: Regarding stop-hunting - I've seen it happen ONCE that I'm sure of (because of certain circumstances, I caught it on and we had money refunded - its an interesting little anecdote that I'll share privately with you). At that point we were in the transition between trading with a reputable retail broker and an institution, so we were seen as large account holders with that particular broker.

CB

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