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Stop-loss hunting definition

Stop-loss hunting

When a market seems to be reaching for a certain level that is believed to be heavy with stops. If stops are triggered, then the price will often jump through the level as a flood of stop-loss orders are triggered.

The extreme volatility experienced when so many stop orders are triggered can prevent useful trading opportunities for many traders including the opportunity to make a quick profit by the large price move or open a discounted position in the expectation that the price will soon rebound to the previous levels.

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