Can Traders Ever Profit from Stop-Hunting?
This is something I have no personal experience with but have been wondering about lately - let's say you have a shady forex broker and you know that at certain times of day they're likely to go on a stop-hunt and pocket some unethical profits. (For the record, I'd close my account immediately if stop-hunting turned out to be a regular feature of their service.) But out of curiosity, would it be possible to identify stop-hunting patterns through careful analysis and place your limit orders at a spot where the broker's likely to spike the price? Or since the broker can see limit orders just as clearly as they can see stop-losses, would the simple act of placing them make the whole scenario unlikely to occur? Stop-hunting turns out to be one of the more popular searches on this blog, which got me thinking if there are any ways to turn the tables on a bad broker by studying their behavior and using it against them. Anyone out there ever turned a profit on a price spike that you knew was a probably a stop-hunt?
Related topic:
So what's stop-hunting, exactly?
Labels: Stop-Hunting
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