Stop Run Mechanics
Stop run mechanics refer to the specific sequence of market movements that target stop-loss orders. These mechanics often involve a rapid price spike beyond a support or resistance level to trigger the liquidity residing just outside the technical zone.
Once the stops are hit, the price often reverts, leaving traders who were stopped out at a disadvantage. This is a common pattern in the crypto-market, where volatility allows for rapid price sweeps.
Understanding these mechanics involves identifying where the majority of retail traders place their stops and recognizing the signature of a stop-run versus a genuine breakout. It is a critical skill for traders who wish to avoid being "shaken out" of their positions during temporary market fluctuations.