This happens all the time, just look at the ER2's faded bullflags yesterday.Quote from Trend Fader:
Awesome movement on the euro today..
I noticed that whenever there is no news and stops are triggered... there is always a huge amout of buying that will lift the market up a huge amount usually near or above the breakout level.
Its almost as if the big traders are pushing the Euro to take out stops and make it drop really hard near a key support level.. and then they come in and load the boat and soak up the huge supply around the stop levels.
Do people trade like this for a living?
--MIKE
If people trade like this for a living? LOL are you kidding? Stop-gunning is one of the most profitable (and fun) things you'll ever do. In case you don't know, this is what futures markets are all about. If we reach a really critical level, where it's obvious where the stops are sitting (usually 1-2T above "setup failure level" LOL), and the tape agrees - you just go for it. Don't fade it, but gun the stops above / below! The quicker and larger you are, the better. Once you fire a few rounds, the others will panic to join you, and BANG, there go the stops.
Why play this game? Because it's incredibly rewarding! You hit all the stops, which go at market and violently propel price your way! It's free money, taken off the noobs who put their stops where everyone else did. Once you're up a few ticks on the stop run and the tape stalls, you can exit for a profit, THEN reverse and load yourself on the supply to take the initial trade, which all the stop-busted people intended to take in the first place.
Stop busting is extremely rewarding, because:
1) Stop levels mean super supply and "domino-effect" stop runs if touched.
2) Once stops are busted, you get lots of supply freebies (panickers)
3) When the run stalls, you suck up the freebies and wait for the correction - in your favor.
4) Once price actually goes in the original direction again, you have a "heavy" position because so many piggybackers were shaken out on stop level.
5) Enjoy the ride - with extra added R:R...
