Do Forex Brokers hunt your Stop Loss?

Let me try and guess what brought you to this page.

You were recently stopped out in a trade by a fraction of a pip, only to see price rebound off that your stop level and head back in your intended direction?

Crazy how that happens isn’t it…

It’s a fair assumption that there is someone, or something out to get you. The odds of being stopped out like that must be a bazzilion-to-one! Right?

Well, kinda.

There is someone out there to get you, but it’s not the broker.

Now that we’ve gotten to know each other a little, let me ask you another question. Did you put your stop level slightly above or below a recent swing high/low?

Be honest… you did, didn’t you?

Now, if I’m able to predict where you put your stop, it’s fair to assume there are a number of other traders out there thinking the same thing.

The major market players like hedge funds and banks use this modeling as their competitive advantage, gobbling up little fish like you as they push the price around and trigger our stops.

These sharks use significant amounts of computing power and predictive analysis to guess what market participants (you and me) are going to do next.

And what’s the one thing that most retail Forex traders do with their stop loss?

Place them just below or above a recent swing high/low.

The idea that a broker is sitting on the other side of your trade, waiting for the precise moment price comes within a bees dick of your stop, then to trigger it prematurely is as likely as that same bees dick being used as a weapon of mass destruction.

You were stopped out because you’re a retail punter that doesn’t understand how the market works.

So wise up and stop putting your stop loss levels where everyone can find them.

Come and join me in the trading room if you’d like to continue the discussion. I love debating the inner workings of the market and finding ways we can use that understanding to improve our collective competitive advantage.

I hope to see you in there.