2/11 About Stop Hunting - Double I FX miscellaneous talk - Navi+ - GogoJungle | Auto Trading - Market Analysis

Reiwa Double-E is here.

When you trade FX,

you may hear the term “stop hunting.”

Literally as read, it means triggering the stop-loss of market participants' positions.

A common pattern is,

when Asian session ends and European traders enter the market,

and together with demand such as the “fix sales,”

the USD/JPY has been falling,

European traders cover their shorts,

causing Asian traders' positions to be stopped out,

and when the overall short positions become light,

the market moves to test the lows again.

Even though the USD/JPY was falling until after noon,

in the evening a chart pattern rises again

is something you can often see.

It’s not that there is extreme malice,

but the interbank dealers at banks or securities firms (not sure if that’s right)

are trying to win,

and in the old days they talked over the phone with other firms,

discussing where the stops might be placed.

Now, in trading rooms they’re not allowed to bring any communication terminals,

but it’s said that you can roughly know where everyone’s SL is by experience.

Also, when the unrealized loss is about 30 pips, many people cut losses.

And occasionally when large orders come in,

they stand out, so they catch attention,

and the market can be made to drive to stop out.

[Considering these points…]

First, an EA that can win repeatedly through stop hunting,

in other words using a long-term upward-trending EA through backtesting, is essential,

build a portfolio with various types of long-term upward-trending EAs,

and not let any single position become too large, I think.

See you next time!

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[Reiwa no Double-E EA Listing]

https://www.gogojungle.co.jp/users/112481/products

[Reiwa no Double-E Series Articles]

https://www.gogojungle.co.jp/finance/navi/series/1700

[Reiwa no Double-E Belief]

Develop EA with a straightforward approach,

gain the trust of more people,

and maintain a long-term WIN-WIN relationship,

aiming to revitalize the EA market and improve literacy.

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