|
Written by Al Parsai
|
|
Sunday, 01 February 2009 |
|
Stop hunting refers to the manipulation of the price by the market maker in order to close their customers' trades at their predefined stop loss levels. For example if many of the customers have set their stop loss levels on USD/JPY at 92.84 and price suddenly drops from 92.95 to that level (i.e. an 11 pips drop) and gets back to its previous value many suspect that the broker or rather the market maker has manipulated the price to hunt those stop losses. Such activity could occur when the market is not liquid and especially when the market maker has taken the opposite side of their customers.
Discuss this term!
|
|
Last Updated ( Saturday, 21 February 2009 )
|
