Liquidity Traps and Stop Hunts – Profit where others lose
|There is a common misconception that stop losses are hunted by brokers, or that banks and financial institutions are after your stops. However there is one thing to understand in the markets and that is the concept of liquidity. The whole markets moves based on buy orders and sell orders and there always needs to be a person on either side for a transaction to occur. Banks and financial institutions use liquidity to their advantage in order to buy or sell at the best possible prices. The concept of liquidity traps will be demonstrated and how to appropriately identify them and avoid falling in their trap.
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