Forex Ambush 2.0
Tuesday, February 17th, 2009

Is it possible for a market maker to “run stops” (deliberately trigger a stop) in currency trading?

I know this happens in stock trading, but what about in currency trading? I don’t know if there are actual market makers in currency markets. I’m asking because twice in one day, my stop was hit almost exactly and the price immediately reversed.

Yes, it is the same thing as stocks. However, with forex the bands are much tighter so it always seems as though you get close to them but never hit.

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This entry was posted on Tuesday, February 17th, 2009 at 7:02 am and is filed under currency trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “Is it possible for a market maker to “run stops” (deliberately trigger a stop) in currency trading?”

naaner Says:
February 17th, 2009 at 12:31 pm

Yes, it is the same thing as stocks. However, with forex the bands are much tighter so it always seems as though you get close to them but never hit.
References :

Vivian S Says:
February 17th, 2009 at 1:05 pm

I had a mini account that is now inactive and I was trading on it just for fun but I was often frustrated that I would set up an overnight trade with stops and it would seem to trigger the trade and then reverse at my stop loss so I lost money. I can't really explain it.
References :

M dub Says:
February 17th, 2009 at 1:49 pm

oh yes, you bet your (whatever) they do. i'm talking futures, of course. and because many contracts are rather thin on the IMM over at the CME, it is their duty to rip everybody a new hole. i mean, if you had enough size to move the market, wouldn't you?

they know where all the support and resistance is, the levels where a lot of likely orders are standing etc. basically, its a shake down just like any other kind in any market or on your street corner.

the less deep or liquid a market is, the more chance this will happen. just try to trade some livestock or poultry. mmmm bacon. the smell of pigs being slaughtered as a new trader enters the market for the first time.

if you can stay around long enough you'll figure it out.
References :
used to own a seat on the cbot and cme

Xelam Says:
February 17th, 2009 at 2:30 pm

yes, stops are also allowed in forex trading. you may refer to this gateway site. it will lead you to a leading market maker which allow their traders to execute their set rates including stop loss and take profit rates. it means, your deal will be automatically closed, exactly on your pre-defined rates but you can always change those pre-defined rates, at any time while your deal is open.

it is highly important to know further that due to the nature of the Forex global market, 100% guarantee on pre-set rates is impossible. this may occur under highly volatile market conditions, where other parties to the Forex trade (e.g. the trader, the platform, the liquidity provider, etc.) are unable to execute specific rates, or specific rate range, due to conditions that are beyond their control.

this particular market maker, however, makes any and all efforts to guarantee the rates, when it is able to do so, unless market conditions prevent delivering the rate selected. all the best.
References :
http://www.optionforex.org

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