How to Avoid Stop Loss Hunting – Indicator MT4

March 25, 2024 Trading system

When a Forex trader sets a stop loss order, they are essentially telling their broker that they are willing to sell their currency at a certain price. This price is usually below the current market price, in order to limit their losses on the trade.

Stop Loss Hunting Strategy PDF and Secrets

However, some unscrupulous brokers may try to “hunt” for these stop loss orders, by artificially driving the market price down to trigger them. This can cause the trader to incur Stop Loss Take Profit significant losses, as they are forced to sell their currency at a much lower price than they had anticipated.

Stop Loss Hunting indicator MT4

Stop loss hunting is a term used to describe the practice of some market participants to deliberately target and hit stop losses placed by other traders in the market.

This is often done in order Buy/Sell Stops to trigger a cascade of stop losses that can lead to a sharp decline in price, known as a stop loss cascade.

Locate the Stop Loss Orders MetaTrader 4

When you are trying to avoid stop loss hunting, the most important thing to do is to locate the stop loss orders. These orders are usually placed by large institutional investors, and they can be difficult to find.

However, if you know where to look, you can find them and avoid being stopped out of your trade. The first place to look for stop loss orders is in the order book.

Set Your Stop Loss Correctly

When it comes to setting your stop loss, there are a few things you need to take into account. The first is the volatility of the market. If the market is volatile, you will need to set your stop loss closer to your entry point. This is because if the market is moving quickly, your stop loss will be hit more often.

The second thing you need to take into account is the liquidity of the market. If the market is not very liquid, it can take longer for your stop loss to be filled.

1. Use limit orders instead of stop orders hunting Buy Sell

A limit order is an order to buy or sell a security at a specific price. A stop order, on the other hand, is an order to buy or sell a security once it reaches a certain price. Limit orders give you more control over your trade entries and exits, which can help you avoid being stopped out by stop loss hunters.

2. Place your stop losses outside of obvious levels.

Stop losses should always be placed outside of obvious support and resistance levels. If you place your stop loss too close to these levels, there’s a greater chance that it will be triggered by false breakouts or spikes.