Trade FOREX with FXCM

  • Award-Winning Platform
  • 24/7 Customer Support
  • Trade Directly on Charts
  • Free $50K Practice Account
View RSS Feed

Macplauz

Faked Trading Signals and Stop Runs by Forex Manipulators

Rate this Entry
by , 01-16-2014 at 07:00 AM (1565 Views)
Popular Chart Levels misused for faked Trading Signals and Stop Runs by Manipulators

Some Popular Trading Levels:

Important Highs/ Lows
Round Numbers
Pivot Points

Market often comes back or gravitates around these popular chart levels and frequently penetrates them to trigger mainstream trading signals and to run for stops.

Be careful with these mainstream trading strategies. Moreover watch out for pure stop runs at these chart levels, which can lead to a strong market turn around. In general, the first breakout is often a false one.

Often a minor false price breakout at Highs/ Lows, Round Numbers and Pivot Points come with the first test of these chart levels to trigger close-by breakout orders and stop orders. The retracement to catch some stops of the breakout traders often gives the faked impression that the popular chart level holds as Support/ Resistance, thus encouraging mainstream traders to position accordingly. However, market often goes for a second test of the popular chart levels to clear the stop orders above/ below important chart levels before either retracing back or breaking through the level targeting the next one.

Moreover, a clean break through a striking trading level without an immediate price retest is very seldom and if so then the chance of a retest in near future is likely to catch stop orders of the breakout traders and to minimize the chance of an easy trade with a small stop lose at important price levels although the reiterating stop triggering process at striking chart levels would suggest this to happen more often in the absence of any market price manipulation.

In general, market price goes there where the stop loss orders are anticipated.

Read more:

Overview: Market Price Manipulation in Forex
Tags: eurusd, forex, trading
Categories
Uncategorized

Comments

  1. Niti Dubey's Avatar
    niti dubey
    Updated 01-28-2014 at 04:45 AM by Niti Dubey
  2. Niti Dubey's Avatar
    hi hello sir how are you
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Forex Capital Markets LLC. will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.