What is a Stop Hunt in Forex?

Understanding Stop Hunts

A stop hunt occurs when price probes liquidity around obvious stop-loss levels before resuming its prior direction. Large players exploit clusters of stops to trigger cascades of orders that provide liquidity for their own positions.

Recognizing Stop Hunts

They often appear as sharp wicks beyond recent highs or lows, especially near support/resistance or round numbers. Volume or tick volume typically surges during the probe.

Defending Against Stop Hunts

Place stops beyond obvious levels, use structure-based exits, or scale out before congested zones. Confirmation from order flow tools or imbalances can help differentiate genuine breakouts from liquidity grabs.

When They Occur

Stop hunts cluster around session opens, major data, and just before key market closes when liquidity is patchy. Equal highs/lows and round numbers act as magnets. Be especially cautious near weekly highs/lows and prior day extremes.

Mitigation Tactics

• Set stops beyond obvious pools; use structure such as swing highs/lows.
• Avoid tight stops in thin liquidity; scale out before likely pools.
• Wait for reclaim signals after the probe (close back inside range) before entering.

Advanced Guidance

Build a repeatable, rules‑based process so decisions are consistent across sessions and instruments. Start from context (higher‑timeframe structure, positioning, macro tone), then define precise triggers and invalidation on execution charts. Track spread and depth so your order type matches conditions. Pre‑compute scenarios (breakout, fakeout, mean‑revert) and map actions for each to reduce hesitation.

Execution Framework

• Plan entries at levels with confluence (structure, momentum, time‑of‑day).
• Place stops beyond the logical invalidation, not arbitrary distances.
• Target at least 2–3R; scale out methodically and trail remainder.
• Avoid thin liquidity windows unless the setup explicitly requires it.
• Record slippage and spreads; poor fills can erase edge.

Review Loop

• Journal setups by session and pair to learn where they excel.
• Tag trades by catalyst (news, trend continuation, range breakout).
• Recalculate expectancy monthly; prune underperforming variants.

Risk Controls

Keep daily loss limits, reduce size after consecutive losses, and pause during regime shifts. Survival enables compounding; treat discipline and execution quality as part of your edge.