Lesson 4 of 25
Stops sit where the chart is obvious
Swing highs, swing lows, equal highs, session highs. That is where the orders rest.
What you see
- Two or three highs at the same price.
- Prior day or session high and low.
- Clean range edges.
Why it happens
- Stops become market orders when hit.
- Big buyers need sellers, so they go where sell stops are stacked.
- The more obvious the level, the bigger the pool.
How to trade it
- Mark the pools before you trade.
- Assume price is drawn to them, not repelled by them.
Journal it: For every loss, note whether your stop sat in an obvious pool.