Stoploss Hunting is Real
2024-10-16

In the provided chart there is a very clear bullish long term cup and handle chart, on top of that there is a sudden spike run as expected that verifies the bullish setup. Due to extreme bullish premise of the chart the consolidation area can be analyzed as the flag and the previous run as the pole, so what is the next expectation? You got it, it is another pole since the price crossed above the consalidation area top, but there is a catch.

In the context of trading, stop loss hunting refers to the strategy where large market players intentionally push the price of an asset to a level where they believe a significant number of stop loss orders have been placed. This movement often triggers these orders, leading to a rapid, often artificial, price decline or spike. For traders who set these stop loss orders, this can result in the premature closure of their positions, typically at a loss, which otherwise might have been profitable. This tactic is particularly effective in environments with clear technical patterns, as they offer predictable points where stop losses are likely to be concentrated. As the price reaches these critical points, the sudden surge in selling or buying activity, precipitated by the triggered stop losses, allows the hunters—often institutional investors or large-scale traders—to enter or exit positions at favorable prices, capitalizing on the artificial volatility they've helped create. Thus, while the chart suggests a bullish continuation, traders must be wary of such manipulations that can disguise themselves as normal market retracements or consolidations.