Stop Runs and Liquidity Hunts: Why Your Levels Get Tagged
Stop runs and liquidity hunts are not conspiracy theories. They’re how bigger players find volume. Your stop is their entry ticket. If you don’t understand how and why stops get targeted, you’ll keep getting wicked out right before the real move starts.
What a Stop Run Actually Is
A stop run is a fast move through a cluster of obvious stop-loss orders. It’s not about “punishing retail” — it’s about unlocking liquidity at a price where large traders actually want to do business.
This ties directly into market liquidity. Stops are just pending market orders sitting above highs and below lows. Blow through them and you trigger forced buying or selling.
Why Liquidity Hunts Are Built Into the Auction
Big players need size. They can’t just hit buy or sell once and be done. They need:
- enough opposite flow to fill their orders
- a reason for other traders to step in
- a way to hide their intent while they build a position
Running stops above a high or below a low creates that forced opposite flow and lets them fill bigger orders without advertising it.
What Stop Runs Look Like on the Chart
You’ve seen this a thousand times. A typical stop run has:
- a fast spike through a prior high or low
- a cluster of wicks in one direction
- immediate rejection back inside the prior range
- volume that spikes during the wick, then calms down
When you combine this with your work on market failure patterns, the picture is obvious: the market just flushed a crowd and flipped.
Where Stop Runs and Liquidity Hunts Usually Happen
| Location | Why Stops Cluster There |
|---|---|
| Prior swing highs and lows | Textbook “safe” stop locations everyone uses |
| Breakout levels | Traders pile in with tight stops just beyond the line |
| Session highs/lows | Obvious intraday reference points |
| Round numbers | Psych levels where lazy risk management lives |
How Liquidity Hunts Tie Into Microstructure
Stop runs and liquidity hunts are just one expression of microstructure imbalance. When the tape tilts one way but big players want the opposite side, they’ll often:
- let price push into an extreme
- trigger a cluster of stops
- use that burst of forced orders to fill in size
From your screen, it looks like a fake breakout or breakdown. To them, it’s just shopping.
Why Your Levels Keep Getting Tagged
There are a few honest reasons you get nailed over and over:
- you put stops exactly where every beginner puts them
- your stops are too tight relative to volatility
- you don’t factor in thin zones and liquidity voids
- you enter on the first break instead of waiting for proof
It’s not personal. You’re just providing easy liquidity in obvious places.
How to Stop Feeding Stop Runs
1. Stop Using the Most Obvious Stop Locations
If your stop sits one tick above a swing high or exactly at a round number, you’re volunteering to be liquidity. Give the market some breathing room.
2. Anchor Your Stops to Structure, Not Fear
Place stops where your idea is clearly wrong, not where it just hurts a little. That might mean smaller size and wider protection.
3. Wait for the Flush Before Entering
In a lot of cases, the best entry comes after a stop run, not before it. Let the liquidity hunt play out first, then trade the rotation back inside the range.
4. Size Down Around Obvious Liquidity Pools
If you insist on trading near prior highs and lows, don’t go max size right into the obvious trap zone.
The Bottom Line
Stop runs and liquidity hunts are just the market doing its job: finding liquidity in the path of least resistance. If your stops sit in lazy, obvious spots, you’re going to keep getting tagged. Shift your risk around structure, respect where liquidity actually pools, and you’ll stop being the fuel for someone else’s trade.