Disliked" the spike has nothing to do with stop hunting. Is just a normal spike caused by lack of liquidity in that pair ............."
this is a retail metality.
the spike is a reset, to clear the board, run the long or short stops.
blow you out.
the marketmaker knows your equity , your % margin used and can see your stops
once they accumulate in the market they run them
they also run a dashboard program by the minute and see it all.
where does a retail trader put his stops.
10 to 25 pips away.
you don't think these guys...Ignored
As anyhow majority of trader will loose. Also an "honest" market maker will have client divided in A book ( i cover the position because this trader is making money) and the B book ( i do not cover as he will loose).
For me as long as the price feed is not manipulated ( as you are suggesting) market making is a good thing. Also ALL the tier 1 bank are market maker.
because at the end of the day they provide liquidity.
Here the point is different , the fact that you say that is no lack of liquidity ever for any for me is not true at all.
and is very simple if you running an stp/ecn and and you have a BOOK then
in the some order present in the book ( limit or stop) are far far away ( AND YOU CAN SEE THEM) it could happen ( and there are various reason for this) that suddendly all the bid and ask offer are removed from the book and the far limit order become the first bid and first ask. FROM THIS THE SPIKE on price. then you will see that the prices almost instantly come back to normal , because a new bid or ask arrive on the market which become again first bid or first ask.
This is a fact! and you can see this many time if you watch any ecn/stpfeed.
what i am not aware of what happens to your stop if you get the spike .
Let ' say if you have a stop -100 pip from current price you get the spike ( sometimes the price is -300 pips) . Do you get stopped out or not?
If somebody has any direct experience please share. Thanks