we move beyond basic Technical Analysis (TA) to discuss the powerful force behind market movements: Liquidity. Liquidity refers to the number of available buyers and sellers at a specific price point.
Whales (large market participants) actively seek out and utilize Liquidity to fill their large orders easily and efficiently without drastically moving the market against themselves prematurely.
🐳Where Does Liquidity Accumulate?
Liquidity tends to accumulate at levels where the majority of retail traders place their Stop-Loss (SL) orders or their Limit Orders (orders to buy/sell at a set price).
🛑 What is a Stop-Loss Hunt (SL Hunt)?
A Stop-Loss Hunt occurs when influential entities (Whales) temporarily breach critical Support or Resistance levels to trigger the Stop-Losses of retail traders. By doing this, they gather the necessary Liquidity (the buy or sell orders) needed to execute their own large trades.
The Pattern: The price often pierces a key Support Level with a sharp Candle Wick, instantly reverses, and then continues in the original direction. This is designed to remove weak hands from the market.
Protection Tip: Place your Stop-Loss orders slightly farther away from the obvious level (e.g., 0.5% buffer) and never exactly on the round number or the visually perfect line. This moves you away from the majority of concentrated liquidity, protecting you from the "Whale Fishing."
Question: Have you ever been stopped out by a Stop-Loss Hunt? How did you change your Stop-Loss placement strategy afterward to avoid it? Share your experience in the comments!
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