Stop Hunting: How Banks Manipulate the Market
Have you ever entered a perfect trade, only for price to spike 5 pips past your stop loss and then immediately head toward your take profit? You just got Stop Hunted.
In institutional trading, stop hunting is not a conspiracy; it is a business necessity. Large banks need your stop losses to fill their own massive positions.
How the 'Hunt' Happens
Institutions see the "Retail Sentiment." They know that thousands of traders have placed their stop losses just above a Double Top or just below a recent low.
- The Run: They use high volume to push price into those stops (Liquidity Grab).
- The Reversal: Once the stops (Sell orders) are triggered, the institutions buy them up to fuel a move in the opposite direction.
How to Trade the Stop Hunt
Instead of being the one getting hunted, wait for the hunt to happen! Look for the Judas Swing during the London open. When you see a "wick" through a clear level, that is your signal that the "Fuel" has been gathered and the real move is about to begin.
Conclusion
Stop hunting is the most profitable event in the market if you know how to read it. Stop putting your stop losses where everyone else does, and start putting your entries where everyone else's stop losses are.
Ready to stop being the "Liquidity"? Join the KTTRFX Inner Circle.
FAQ
Q: Is my broker hunting my stops? A: Regulated brokers rarely do this. The market itself (the big banks) is who is hunting the liquidity pools.
Q: Where should my stop loss be? A: We recommend placing it at a level where, if hit, your trade bias is completely invalidated, not just a "round number" level.
Q: Does stop hunting happen on the Weekly chart? A: Yes! Institutional stop hunts (Liquidity Grabs) happen on every timeframe.