Daniel P657_ Adams

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What is stop hunting in forex and who does it?

Stop hunting refers to deliberately pushing prices into zones where retail traders’ stop-loss orders cluster, triggering cascades. While often blamed on brokers, in reality large institutions exploit predictable stop locations around round numbers or obvious levels. Benefits for hunters: access to liquidity. Risks: manipulation accusations and volatility spikes. Retail traders can defend by avoiding obvious stop placement and using wider structures. Understanding stop hunting reframes it not as conspiracy but as natural market mechanics—liquidity is needed, and stops provide it.