What it means
Stop-hunt is a market move designed (or emergently arising) to trigger a known cluster of stop-loss orders, take their liquidity, and then reverse back through the level. Common around obvious technical levels (round numbers, prior swing highs/lows, 200-period moving averages) where retail stops cluster. The move can be intentional (large player sweeping liquidity) or emergent (multiple algos detecting and exploiting the same cluster).
Why it matters
Stop-hunts are why placing stops at obvious levels (round numbers like EUR/USD 1.0800, prior session highs, 200 SMA touches) is operationally expensive — these levels are predictable and exploited routinely. Stops behind structural levels (volume nodes, prior reaction extremes with buffer) are less vulnerable.
How to use it
Avoid placing stops at obvious technical levels — set them 5-15 pips beyond the level (the stop-hunt margin) or behind volume-cluster reference points instead. For active scalping strategies, recognising the stop-hunt pattern (move + immediate reversal) can itself be a reversal-trade signal.
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