Price Magnets: Why Certain Levels Pull the Market In
Price magnets are levels the market keeps getting sucked toward no matter what the immediate trend looks like. These aren’t mystical lines—they’re places packed with liquidity, trapped positions, algorithmic interest, or unfinished business.
What Makes a Level a “Price Magnet”
A price magnet is simply a level the market wants to revisit. It’s a point where:
- liquidity is sitting
- orders were left behind
- traders got trapped
- important volume traded previously
This connects strongly to Market Memory because magnets often form where past battles occurred.
The Four Main Types of Price Magnets
| Type | What It Means | Why It Pulls Price |
|---|---|---|
| High-Volume Nodes | Areas where tons of volume traded | Market returns to “fair value” |
| Imbalance Zones | Places left behind during fast moves | Market likes to repair inefficiencies |
| Trapped Position Areas | Where traders got smoked | They want out → liquidity cluster |
| Liquidity Pools | Pockets of stops or resting orders | Markets hunt liquidity |
How You Spot a Price Magnet on a Chart
You’re looking for places where price:
- repeatedly returns
- hesitates or chops
- launches from and then snaps back
- rejects hard once but revisits again
Combine this with Market Structure and the levels become obvious.
Why Price Gets Pulled Back to These Areas
1. Unfinished Auctions
Price left too quickly and didn’t establish value.
2. Hidden Liquidity
Institutions have more to fill—see Hidden Liquidity for how this works.
3. Positioning Imbalance
Traders who were wrong want out, creating a magnet effect.
4. Algorithmic Targeting
Algos love returning to volume-weighted prices.
How Price Magnets Impact Your Trading
- Don’t chase moves far away from magnets
- Expect snapbacks into the magnet before trend continuation
- Use magnets as profit targets
- Use magnets as areas to fade short-term extremes
The Bottom Line
If you understand price magnets, you stop being surprised when a “strong trend” snaps right back to a level that looked irrelevant. Magnets guide price whether you see them or not.