Stop Blaming Market Makers

Nobody is hunting your stops. The two real reasons you keep getting stopped are structural, and both are yours to fix.

'The market makers are hunting my stops.' How many times have you heard somebody use that excuse on X, whether they're joking or being serious? 'They saw where I put it and came to take it.' I'll be blunt. They didn't. You're not that important, and neither am I.

A retail stop on a CFD is a market order sitting at a price, waiting to fire. There are millions of them scattered across every level of every instrument.

No desk is running an operation to find yours on a $10k account and reverse the entire market to trigger it. Sit with the maths for a second. To push price to your level, someone has to absorb every order in between and move the whole book against real size. The cost of that dwarfs whatever they would collect from stopping out one retail position.

It makes no commercial sense, and the people you are imagining doing it are the least sentimental, most cost-driven operators in the market. Real liquidity providers mostly do not know or care where any individual retail stop sits. They are pricing flow, not reading your chart.

What actually happens

So why do you keep getting stopped right before the move? Two boring reasons, and both are yours to fix.

Your stop is in an obvious place. If you tuck it just below the recent low, you have parked it on the most obvious shelf on the chart, the exact spot everyone else drew the same line. Price probes for liquidity where liquidity pools, and obvious levels are where it pools, because that is where the crowd has stacked its orders. That is not a desk hunting you. That is a hundred people leaning on the same shelf and price coming to lean back.

The fix is structural: size the trade so the stop can sit where the structure actually justifies it, well clear of the level every retail chart is flagging. If the only place your stop fits is right under the low, your position is too big for the idea.

If the only place your stop fits is right under the low, your position is too big for the idea.

Your stop is too tight for the volatility you are trading. A fixed pip stop on an instrument whose average range just doubled gets clipped by normal noise long before your idea has a chance to work. Gold may range 200 points on a quiet day and 600 on a hot one. Run the same 150 point stop through both and you will get chopped to pieces in the second regime and call it a 'stop-hunt'.

It is a sizing and volatility problem. Anchor the stop to current range, an ATR multiple or the actual structure, and size down so the wider stop still respects your risk per trade.

Why systematic traders think differently

When a rules-based strategy gets stopped, you do not get to blame anyone (unless it's the BoJ intervening of course). I go and check one thing: was the stop at a level the backtest expected to lose at sometimes? Almost always the answer is yes. The strategy is behaving exactly as tested. A losing trade at a level that loses 40% of the time, and the stopout is just that probability showing up. My job in that moment is to leave it alone, which is harder than it sounds and the whole reason I wrote the rules down in the first place.

The stop-hunt story is comforting because it puts the cause outside you. Everything you cannot control is doing it to you, so there is nothing to fix and no work to do. The problem with that comfort is it stops you touching the two things that were actually wrong, both of which lived inside your own trade. Stop placement and sizing are not glamorous, but they are yours.

If you keep getting stopped, look at your stop placement and your position size before you look at the market makers. One of those you can change by Friday. The other you cannot change at all.

Personal commentary, not advice. Capital at risk.