Lots of people who trade CFD's think that when they are taken out of the market by a stop and then the trend proceeds in the original direction, that the CFD provider has sort our their stops. I have suffered the same inconvenience, but have since adjusted my technique. I believe that most of the time it is nothing more sinister than an educated trader knowing where the stops are likely to have been set by us plebs, and taking advantage of it.
It is bad for us, but I take my hats off to these people as they possess a very useful skill.
HOWEVER- today, when trading the AUS200 cash cfd, I saw something to lead me to believe otherwise. Now, before I go on, I am happy for someone to prove me wrong on this - in fact I would be stoked!
I believe this to be a bit of rigging by my marketmaker because I also watch the actual SPI contract. If you look below, the chart on the left is the CFD and the right is the SPI. You can see that the price drops away rapidly, before it starts to consolidate. And it is in this consolidation that I believe the rigging occurred. You can see that at no stage does the price of the SPI rise much above 3530. 3530 is a level equivalent to 3520 on my CFD chart. However, if you look at the CFD chart, the price rises significantly above 3520! I should also say that the green candle soon retraced and moved back below 3520 after the screenshot was taken!
Can anyone suggest a reason for this difference in price move? Could there have been a large spread in the bid/ask price of the SPI at this point?