Price Action Forex Trader

A lot of Forex traders are afraid of their brokers.  And don’t get me wrong, you should investigate your broker before giving them your money. The biggest complaint that confuses me is broker stop hunting.

Forex traders think by placing a stop loss on their trade, the broker knows where it is and will purposely do something to knock them out of the trade.  After all, getting your stop hit is quite common.  You place a trade and your stop loss… then you watch price move against you to take you out of the trade before moving in the original direction.

I hate when it happens to me.  But I think your anger is directed toward the brokers instead of the traders really responsible. Most likely it is not the broker hunting your stops… but the professional Forex traders. (After all, most of us are not trading accounts that matter in the big picture… so it is a little egotistical to think the broker cares about our tiny trade).

Here is a more logical explaination of what is going on…

Here is an example of why stop running happens.  You, the novice at home trader, have identified a good level to SHORT a currency pair.  You place your SHORT trade and put your stop loss in a logical place… the last swing high.  And things see to go your way… until Price reverses direction and takes out your stop!

Well, the professional traders also identified this area to go SHORT, but they don’t want to jump on a train that is already moving.  Therefore, they push price UP, knowing where most traders have their stops. Then they reverse their trade and go SHORT.

This strategy accomplishes a few things.  They get into the SHORT trade at a much better price with much more profit potential. Since they know the market wants to go short, they can create momentum by taking out the stops of the traders already in the trade… knowing they are going to jump back in when price falls again. This is how the professional traders can get into the move at the beginning and make profits faster.

I hope you can see that stop running is not really about just you and your broker.  Professional traders use this technique to make more money.  I think it is shortsighted to focus on the brokers and more accurate to focus on the big Forex traders.

This is just one example of how learning price action Forex trading can give you insight into what the big Forex traders are doing. They are, after all, the ones moving the markets.  Price on your chart gives you insight into what they are doing and which way they want to trade… which you can use to trade WITH the pros, and not against them.

So, stop looking at your broker as the cause of your stops being taken out.  That is unproductive.  Learn to identify what the big traders are donig and turn stop hunting by the pros to your advantage. The next time you see a perfect trade setup that reverses to take out the previous swing high or swing low… join the big traders for more profits faster!

Luckily for us, Dr. Barry Burns shows us how to profit from the stop running the big traders do.  You can see a video where he explains the “Stop Running Setup” here: Dr. Barry Burns Stop Running Trade Video

And if you haven’t take his free 5 day Forex email course, I suggest you do.  He know only explains som common mistakes novice traders make when price action trading, but reveals his “Rubber Band Trade” on day 5:  Dr. Barry Burns Free Forex Course

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