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It’s a hard fact to swallow sometimes but the fact is that the markets are only 20% trade 80% speculation. I often find unless there is HUGE economic data a trend will not turn on sixpence. Common sense should always be applied as should the trend!
The above image is nothing special and can be commonly found though-out the FX market. The concept of stop hunting isn't a new one, and it should not be confined to the conspiracy files. It is something easily found on most charts and is easily exploited. Why is it easy? Because these pattern are easily seen on longer term charts and therefore harder to hide... You can’t hide a long term trend!
The best question to yourself is why would a trend suddenly spike or turn, take out stops and then continue with the original trend? We all know why! But we struggle to believe it because it goes against normal trading strategies.
The big players own the market, there is no point in arguing this fact, large players when in tandem will move markets; and always to their advantage. Why not spend 50 mil to move a pair to a price where you know there is 500 mil of stops and therefore cheap prices too take advantage of and send it in the other direct…
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Elani avatar
Elani 20 Oct.

Yeah, I agree with you when something goes against the normal flow in the market then there has to be reason for it

ANABEVZ avatar
ANABEVZ 20 Oct.

RobFX Wish you always have right answers on your questions!

ANABEVZ avatar
ANABEVZ 20 Oct.

RobFX Wish you always have right answers on your questions!

peachynicnic avatar

Thanks for your article. It is very informative with detail explanation and chart! A brilliant one indeed! Thank you so much!

VictoriaVika avatar

RobFX Thank you for article! We can see here your great dedication and effort!

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34/73
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Trading big figures in the fx market can be very interesting. By big figures I mean those round numbers, divisible by 100 pips, like today on 3rd of august  the level of 1.4300 for EURUSD.  Basically 2 common behaviors can be found around those areas: AttractorsAs a lot of traders place there stop buy or stop loss orders at big figures, high attention is payed to those levels by the big players in the market, who may have an advantage to move the market in this direction. Often a movement can be seen like the morning of 3rd of august, when the EURUSD fluctuated around lower levels during the hours before european market opening hours and then suddenly at around 9 GMT, when the traders put enough liquidity into the market the price jumps sharply to the "big figure" level:Forex dealers activitiesWhen looking more into detail, a second pattern can be detected: when the price jumps to this big figure level it usually comes back 5 to 10 pips below this level immediately afterwards. I read about this behavior first in the book with the lurid title "beat the forex dealer" from Augustin Silvani. He explained it with activities initiated by forex dealers who just want to catch the stop loss…
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traderingo avatar
traderingo 10 Aug.

at the end is it not clear how to trade .

Am ende versteht man nicht was du meinst, also wie man das traden soll? .Das nennt man auch glaube ich stop-chasing und kommt auch ofters in wichtigen support und resistance vor, wo der preis bis 50 pips uber den resisitacne level geht und dann wieder zuruck kommt.

schnitzel avatar
schnitzel 14 Aug.

Hi traderingo - sorry if my description might not have been clear enough. Basically there are 2 ways to trade this: one to "ride the wave" in the direction of the big figure. The other is to enter the trade when the big figure is reached and take profit when the prices go back in the opposite direction. Sure it is up to you to fine tune the exact levels for entering the market, which depends on the currency pair and overall market trend situation.

ritesh avatar
ritesh 26 Aug.

in big unregulated markets these techniques do work. never tried though, everyone's tastes are different. you're welcome to taste my pipping strategy schnit. +1

ritesh avatar
ritesh 28 Aug.

check out my articles too at http://www.dukascopy.com/fxcomm/fx-article-contest/?action=blog&user=ritesh

LinnuxFX avatar
LinnuxFX 30 Aug.

Clear and readable article, good luck for contest ...

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