Quote from: dothebeats on November 30, 2017, 03:50:42 PM

Quote from: cryptician12 on November 30, 2017, 02:16:44 PM

One other thing is that exchanges see where most stop orders are accumulated. Possession of this kind of info is extremely powerful and should not be underestimated. Seriously! You don't need a lot of funds to actually trigger an avalanche of stop orders and then buy cheap at the very bottom. And who knows what exchanges do with this info... maybe they use it internally, or sell it to the highest bidder.

Wouldn't that be fraud in some way and the exchange operators can be sued? That would be a serious breach in security for all the users that entrusted them with money and should be given the right lawsuit. We never know what happens behind the scenes on a trading platform. All we know is that they have all the information we relay to them that can possibly screw is if they used it for other purposes other than identification, proof of transactions and what not.

Personally if I'm not around or I think I wouldn't be able to keep up with the trading action, I don't place any sell orders but usually buy orders. Stop-loss? I use it only if I have to do something real quick and be right back immediately afterwards. It also occurred to me that exchanges also manipulate the prices, up to a certain point where they can touch stop-loss in order to make quick profits. It would be fraud, but what do we know right?

Sure, but not all exchanges are regulated, which makes their "behind the scenes" that much more invisible and thus harder to sue and prove anything. As an example, just look at the Forex industry (which in my opinion isn't very well regulated at all). Lots of scam brokers out there, and I'm sure you'd find lots of stories with people whose lawsuits went absolutely nowhere. Now, I don't know for certain what crypto exchanges do and do not do, but I'm guessing that due to the lack of regulation, the temptation to utilize that sort of information is pretty big. I also agree with TheQuin on the point that pro traders have a rough idea where the stops might be, and they place their trades accordingly. That's a big factor as well.

And just to clarify, I'm not completely against stops. I do use stops as well but only on more or less liquid markets. They are ok as long as you use them wisely and understand all the risk involved.