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Hi RTs,
I don't think that the locals will try to hunt the stops that are too
far out of the current price. The reason (my guess) is that will
trigger a lot of MIT orders. A friend of mine who is very good at
counter-trend trading uses a lot of MIT orders. He likes to pick the
tops but not the bottoms. He usually places a large number of MIT
orders near resistance and waits for the market to move up there.
Fortunately for pit traders, many Exchanges take care of this problem by
banning the MIT orders.
Mervin
BrentinUtahsDixie wrote:
>
> Not having any actual experience in the pits; I think that there is some
> evidence that the traders there DO have access to information on where stops
> are. Here is some reasons why.
>
> A. Somebody has to know what your order is or they couldn't execute it.
> B. The news often has reports that read something like "large numbers of
> stops are
> expected to be hit just above 111.50".
> C. Several articles that I have read in publications such as Futures
> Magazine have said that, traders in the pits have access to information
> where stops are placed.
> D. Personal experience makes me believe that they know.
>
> Now if someone knows for for sure what the truth is, it would be
> appreciated. It makes sense that even the pit traders don't want to go too
> far out of their range to get stops unless conditions that make for extreem
> volatility are in effect. What I'm getting at is that there is a point out
> there where your stop is going to be safe, at least for today. For example;
> if you are trading Sugar and you are short, you put in a stop at say one
> hundred and fifty dollars and I'd say it was safe for today:-)
>
> Brent
>
>
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