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Ira,
Thanks for your reply. I have heard this before, regarding stops. (That
there is no reason to go after 1 or 2 contracts). While I understand it, I
don't completely agree. I got the time and sales once after I was stopped
out of a bean oil trade from the exchange. Where I had put my stop there
were only about 4 contracts. However, there were a number of small orders at
irregular intervals all along the way to the point where I had my stop.
There are more than one or two traders in most pits. So between the lot of
them it could be well worth their while to run the stops for small orders.
If you pick up $100 extra a day that adds up to $25600 per year, er so. I am
fully aware that there are levels where most stops are located. That still
doesn't satisfactorily explain what I have seen happen. I'm not saying that
I don't believe you. I'm not sure. I'd like to see a report by an official
third party that had investigated this, or at least something from an
exchange stating the official policy.
In case they have not gotten to the forum I have several statements from
persons saying that what I allege is true and some saying it's not true.
Brent
-----Original Message-----
From: Ira <ist@xxxxxx>
To: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
Cc: Real Traders Forum <realtraders@xxxxxxxxxxxx>; cpbow@xxxxxxxxxxxxx
<cpbow@xxxxxxxxxxxxx>
Date: Sunday, June 27, 1999 3:56 PM
Subject: Re: Learn from...
>Most pit traders don't have access to that information. They do know how
to
>read a chart and once you can do that, the location of stops is obvious.
The
>ones that aren't obvious are the money stops, because there is no logical
>trading reason for a money stop. If you are trading one and two lots,
there is
>no reason for a floor trader to sell/buy 40 or 50 contracts to get to your
2 lot
>stop. If there was a 50 lot down/up there a floor trader would buy/sell 30
or
>40 to get there, wouldn't you. So don't be so touchy about your couple of
>contracts, the world or the markets do not oscillate around your stop. Of
>course if you are a heavy hitter, then you might think twice. But then
again,
>if you are a heavy hitter, you got there by knowing where to put your
stops.
>Have a good week, Ira.
>
>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
>>
>> >I'm sure the locals run the price up and down either following micro
>> >trends themselves or even trying to get the mkt to places where they
>> >believe stops are concentrated, based on the *charts*. But do you
>> >really think they know where the actual orders are? Perhaps this isn't
>> >that important a point - if you tend to get stopped out, who cares if
>> >it's random noise, or the pit going after your stop specifically? But
>> >if it is an ungrounded fear that makes people tend to not put stops in,
>> >then I think it's a question worth asking.
>> >
>> >My belief is that in almost all cases (barring some illegal activity),
>> >the locals (and off-the-floor daytraders) do not know where the orders
>> >are. They simply are trading very short-term, either as trend followers
>> >or contra-trend. The trend followers would like to get on board
>> >*before* the trend, so if the market is wandering upwards and they think
>> >it could go thru some stops they will buy (and conversely the contra
>> >trend locals will stand aside). This extra buying may actually help
>> >push the mkt thru the stops. (But if it fails to, then the locals lose
>> >money.)
>> >
>> >If you are a position trader, maybe the key is to place the stop far
>> >enough away that most times, if it is hit, it signals a true reversal
>> >(even if temporary). Most of the time my stops are hit I'm glad that I
>> >am out. (I know you really can't separate them, but my problem seems to
>> >be more entry selection and profit taking, than stop.)
>> >
>> >Conrad Bowers
>> >
>
>
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