Stop hunts are not personal
Reading a chart · OnlyTrade trading school
Under an obvious low sits a cluster of stop orders, and a stop order is a market order waiting to happen. Anyone who needs to fill a large position at a good price benefits from price dipping there: the stops become the liquidity they buy from. That is why price so often pokes through an obvious level and immediately comes back — the level was the point. Practically: obvious levels are where you place your analysis, not your stop, and a candle that sweeps a low and closes back above it is information, not an accident.
About this lesson
Written by the OnlyTrade team as a general explanation of a market mechanic. It uses no live market data.
Education, not investment advice. No method or result is guaranteed, and trading can lose money. Read the Risk Disclosure.