Would You Choose to Move the Price or Guess the Price?

[Jason]

If you had a few billion to intra day trade with, on a normal trading day that's not dominated by political news or a high impact economic release, would you choose to move the market drastically, i.e. try to get a rally/breakout going, or would you choose to guess the direction and continuously add small positions through out a certain timeframe?

[Jemook]

Hi Jason,

Cool topic mate. I'd choose to move the market because guessing which way it's going never worked for me before

J

[Jason]

'Guess it' could mean 'educated guess', or 'choose a direction after doing your analysis'

[Jason]

I wonder how stop hunters manage to execute what they do? There must be other massive traders at any one time during the European and US sessions with differing objectives. Do they just call each other up and organise a coordinated effort instead of waging a titanic battle everyday?

[SteveHopwood]

I wonder how stop hunters manage to execute what they do? There must be other massive traders at any one time during the European and US sessions with differing objectives. Do they just call each other up and organise a coordinated effort instead of waging a titanic battle everyday?

My understanding is they have software that detects when the market is within a 'reasonable' distance from your stop and sends a spike to hit it. Then they can manipulate the candles on your chart so that it looks as though the spike really happened. These guys are criminals.

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[Jason]

I think we might be talking about two different types of 'stop hunting'. I'm talking about the type mentioned in the book 'The New Market Wizards' where Bill Lipschutz recounts a time in the late 80s when a big trader knew everyone was bullish so they went short instead and picked off stop loss orders 200 points (pips?) below the market. The book didn't mention the term 'stop hunting' but I've seen the term used to mean traders moving the market to 'pick off stops' elsewhere as well.

http://www.hathersage.com/fx/nmw_5.html

There must be a lot more big players these days so I was just wondering whether they cooperate or fight it out.

My understanding is they have software that detects when the market is within a 'reasonable' distance from your stop and sends a spike to hit it. Then they can manipulate the candles on your chart so that it looks as though the spike really happened. These guys are criminals.