Every trader has faced it—price suddenly spikes to hit your stop-loss, only to reverse in the exact direction you expected! ? Is the market rigged, or is there a way to avoid these stop hunts?
? What is a Stop Hunt? Market makers and large institutions target areas where retail traders place stop-loss orders. Once these liquidity pools are triggered, big players enter at better prices, leaving small traders trapped.
? How to Identify Stop Hunts: ✅ Look for price clusters where many stops are likely set (support/resistance zones). ✅ Fake breakouts—price wicks above/below key levels but quickly reverses. ✅ Unusual volume spikes before major moves.
? How to Protect Yourself:
Wider stops: Instead of placing stops at obvious levels, use volatility-based stops. Partial exits: Scale out of positions gradually instead of using a single stop-loss. Liquidity traps: Watch for manipulative moves before major news events.