Tuesday, June 16, 2009

What is Stoploss Hunting

This is Hector from Hector Trader

Before I get started, in case you cannot read this email properly (images and stuff), you can also read it here: http://www.hectortrader.com/NewsLetter/stoplosshunt.htm

A few days ago I received an email from one of my readers asking what " Stop Loss Hunting " actually is. Apparently I mentioned it in one of my videos and he didn't know what I was talking about. So in case you are wondering that to, here is an explanation of what this Stop Loss Hunting thing is in a nutshell.


What the books say
Investopedia.com defines stop loss hunting as: "A strategy that attempts to force some market participants out of their positions by driving the price of an asset to a level where many individuals have chosen to set their stop-loss orders... It is nothing more than the art of flushing the losing players out of the market"...


What does it look like?
Good, good... but what the hell does that actually mean?! Well, let me show you a chart for a clearer view:

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