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In Feb TAS&C, there's an article about stops.
In it,,,the writer mentions about floor traders' Gunning your stop.
Whey they think market would go up they bet down to pick up a few points taking your stop out.
Like Brent said,,,you have to think like them to avoid this.
We can see lots of cases when the market advances higher it retraces just around the point of last High swing point then,,pick up higher.
And most of us use that previous peak as a stop-loss point.
Right,,we have to think like them!!!!
*********** REPLY SEPARATOR ***********
On 1/28/98, at 3:48 PM, BrentinUtahsDixie wrote:
>RT’s.
> If I understand the bulk of the pit traders and locals, they are trying to
>scalp a few points out of the daily trading range. I heard a quote from a
>pit trader, and paraphrasing he said, “I don’t know why so many traders put
>there stops near key support and resistance levels where they can be easily
>gotten to, but I’m sure glad that they do.”
>
> I’m sure that there are a bunch of other sure glad that they do things,
>like buying out of the money options etc. but the point here is that to be
>a winner you need to think a lot like they do. For example think; If I were
>a pit trader what would I be hoping someone would do so that I could
>exploit them. When you figure out what that is, don’t do the thing that
>makes you an easy target.
> For example nine days ago Soybeans put in a very large range bar against
>the prevailing market movement. Why? The news was unremarkable and little
>else was afoot. My personal opinion is that the market was becoming
>overloaded with shorts. So they took out as many as they could within the
>range. Those using parabolic stops for example were stopped out. Whether
>that was good or bad is beside the point. If you were thinking like a thief
>you might have taken profits earlier. Or had your stop placed sufficiently
>far away to not be stopped out.
>
> Us traders that are not in the pit cannot compete with pit traders on
>their level because the lag with even real time data is enough that you
>would lose most every time. This does not mean that you can’t win but you
>have to learn to exploit your advantages as they do. So I submit that you
>need to ask if I were in there shoes what would I do.
>
>Best Regards,
>Brent
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