Stop-Run Mechanics
Stop runs aren’t manipulation. They’re liquidity events. The market goes where the orders are, and retail clusters stops in the same obvious spots every time. When price rips through those levels, it isn’t “hunters”—it’s the natural reaction to a pile of forced orders hitting the book at once.
Why Stop Runs Happen
A stop run occurs because stops are liquidity. Stops are guaranteed market orders waiting to trigger. When price reaches a level loaded with stops, it gets a burst of forced flow.
- tight clusters below swing lows
- obvious breakouts above highs
- round number levels
- session extremes
This ties directly into the concept of liquidity shocks—stop clusters can be the trigger.
The Mechanics Behind a Stop Run
When stops trigger, they behave like a wave of aggressive orders:
- sell stops → aggressive sell market orders
- buy stops → aggressive buy market orders
These orders smash through thin liquidity and cause price to accelerate violently. That acceleration is what people mistake for “stop hunting.”
What Stops Look Like on the Tape
You see clear signs when a stop run is firing:
| Sign | Meaning |
|---|---|
| Sudden surge in tape speed | Stops triggering in sequence |
| Depth evaporates | No one wants to absorb flow |
| Fast wicks | Stop cascade into thin book |
| Direction flips after the run | Inventory absorbed and reversed |
Why Price Often Reverses After a Stop Run
Stop runs remove liquidity and force out weak positions. After that:
- market makers rebalance inventory
- aggressive flow dies down
- fresh liquidity enters
That’s why stop runs often reject immediately—they're clearing the zone, not starting a trend.
Stop Runs Inside Market Structure
Markets often run stops at key structure points for one reason: liquidity concentrations.
- prior highs/lows
- gap edges
- VWAP deviations
- range boundaries
Pairs well with understanding market regimes—stop runs behave differently in trends vs ranges.
How to Trade Around Stop Runs
- don’t place stops at the obvious cluster zones
- wait for the stop run → then watch reaction
- if depth returns fast → reversal likely
- if depth stays thin → continuation possible
Bottom Line
Stop runs happen because traders pile stops in the same predictable places. The market clears out that liquidity when it needs it. Recognize the mechanics and you stop being the fuel for the next flush.