No, SL sits with exchange only but in sl order book, once it trigger it will go normal order book based on limit or market.
who can view SL order book of the Exchange ? can the other broker trading member or any other person view/know my SL ? can my SL order price level be leaked ?
@siva
We keep deleting your posts, because you keep spamming. We’ve restricted your posts, if this continues, we’ll suspend your account. You won’t be able to create posts. This is getting out of hand!
I have been reading up on Market Microstructures, and the author touches the topic of gunning of stop orders in the market. It is illegal and same time difficult to prove that someone is gunning the stop orders. It is mentioned that, specialists, dealers can try to gun the stop orders, and get the liquidity that they want, that too following the rules of the exchanges and always giving priority to the traders first. In case of NSE/ BSE, the orders are automatically crossed, so market makers / dealers / speculators may not get to see the stop orders as @siva explained. (I already raised this question seperately, then started researching in parallel)
We are all discussing as if the stop orders need to be in front of the experienced speculators, system traders. They make money by seeing the patterns and placing their orders accordingly. Think, if you have to gun the stop orders of an amature, what strategy will you follow? Looking at the order book would be the least helpful method. By seeing the price action, the speculators can try and guess where the stop orders can be, whether it is placed in the system or in a trader’s mind. Poker Anybody!!!
I have been practicing to keep stop loss only in mind, and at price levels which are not close to any support or resistance levels. This is where most of the technical traders / new system traders/ new speculators keep the stops. Even then, it is not fool proof, because price itself can randomly move. Another option that I took from the Turtles system is to keep the SL at 2 ATR distance from the entry price. These methods have kept me in the market for considerable time, and given space for the price to move.
Happy Trading.
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Can u pls explain this ?
What does it mean ?
If u keep the SL in mind and not in the system ; how do u protect urself in case of any black swan event ?
What is it ?
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Does every stop loss is caused by smart money or is there any foot print that planned stop loss hunting was executed by smart money?
Today I experienced what seemed to be an episode of Stop Losss hunting:
While implementing an intraday strategy, today morning I had sold BankNifty 33500 PE at Rs 18.70. At 14:30 Hours I put a ‘Stop Loss - Market’ (SL-M) order at Rs 37.55. Two minutes later, at 14:32, the price of PE soared from 15.00 to Rs 38.00 and my SLM was triggered and I was out of position at a handsome loss. After my SLM was hit, within few seconds price fell to Rs 18.00 and continues around this level.
Above seems to be a case of Stop Loss hunting. Has anyone experienced such Stop Loss hunting? How often does it happen and what is the solution?
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On some analysis I find that Banknifty itself recorded a steep fall in the 14:32 minute candle. This could have possibly triggered some Algo’s response to give a spike in the PE’s price.
Anyway, is there a way out of such spike triggers / stop-loss hunting?
This can be attributed to volatile movement causing the premiums to spike at all strikes causing a domino effect to quickly execute all the SL-M orders nearby. Remember when you have a SL-M order as stop loss, the other side some buyer also has kept a SL-M order to buy the option - buyer is assuming that there is an impending breakdown/breakout which essentially failed.
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I think this video will demystify the topic of Stop Loss Hunting:
You had a loss.