M3 · L1Liquidity & Stop Hunts
Where Retail Traders Put Their Stops
Retail traders have been taught to put stops below support. Banks have been taught to hunt those stops.
What This Means
Every trading course, YouTube video, and textbook tells beginners: 'put your stop loss below support.' So every beginner does. This means at any key support level, there are thousands of stop loss orders clustered just below it. Banks see this as free liquidity — they push price down to trigger all those stops (buying from scared retail traders at a discount), then reverse price upward.
Visual
The Rule
Retail stops below support = liquidity pool for banks.
Where you were taught to place your stop is exactly where you get hunted.
COPY THIS
Do these steps exactly1
Find a clear support level on the chart (previous swing low)
2
Imagine every retail trader who bought above this level has their stop just below it
3
Mark a zone just below the support level: label it 'STOP HUNT ZONE'
4
Watch what happens when price approaches this area
Often: price dips below (triggering stops), then snaps back above. That's the hunt.
5
Note: the candle that triggers the stops usually has a long wick below the level
Common Mistake
Don't put your stops at round numbers ($1900, $1950 on gold) — these are the most obvious levels and get hunted the hardest.