|
PureBytes Links
Trading Reference Links
|
Hi Stewart
How can a newbie tell where the majority of the stops are at?
Thanks
Gary
Stewart Taylor wrote:
> I don't think that it takes much more complicated than looking at the chart
> to tell where the majority of the stops will be hidden.
>
> Stewart.
>
> At 02:14 PM 6/27/99 -0600, 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 extreme
> >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
> >>
> >
> >
> Stewart Taylor
> Taylor Fixed Income Outlook
> Voice: 501-219-9774
> Fax: 501-228-0963
> E-Mail: staylor@xxxxxxx
> Web Site: http://www.cei.net/~staylor/
|