• Suzi
  • 20.01.2023

Today we will discuss one, it is possible to say, rhetorical question, which often arises both in beginners and quite experienced traders. This question is as follows: "Why, as soon as my stop works, does the price unfold?"
In fact, why does this happen, does the market see where you put your warrants, and why do you want to kick them out, immediately turning in the original direction?
Main idea
Let 's say you found the "Takeover" model on the chart and concluded that the price would go up in the future. It does not matter whether the indicator or the trading system showed the signal. The question is, where would you put stop loss here? Most likely, either under candles or near the last local minimum. It would seem to be all right, but then the price knocks your stop loss, and leaves as intended, upstairs. I think you can give a lot of similar examples yourself.
Why does that happen?
The fact is that in addition to other traders like you and I, there are big players: hedge funds, banks, various institutional investors. They open quite large positions, that is, positions of very large volume, which require a sufficient level of liquidity.
If a similar position is attempted to open in the middle of the trend, the large volume can shift the price strongly in the direction of the position, but after that the price is highly likely to roll back, leaving the trader at a disadvantage.

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