A stop hunt - or liquidity grab - is a sharp move that pushes price just far enough to trigger a cluster of stop-loss orders, then reverses. To the trader who got stopped out at the exact low before the bounce, it feels targeted. The mechanism is real; the intent is usually structural, not personal.

Why stops cluster

Traders place stops in predictable spots - just below obvious support, under the prior-day low, beneath a round number. Those clusters are pools of resting sell orders (for longs) or buy orders (for shorts). To larger participants who need liquidity to fill big orders, that pool is exactly where the counterparties are.

Deliberate or emergent?

Sometimes it is deliberate - price is pushed into a stop cluster to trigger forced selling that a large buyer then absorbs cheaply. More often it is emergent: everyone put their stop in the same obvious place, so a normal test of the level cascades into a flush. Either way, the obvious stop is the dangerous stop.

If your stop is where everyone else's is, you've told the market exactly where to hunt.

Placing stops smarter

The defense is to stop being obvious. Placing stops a volatility buffer beyond the crowded level - sized by ATR rather than at the round number - keeps you from being flushed by a wick that reverses. A stop should be triggered by a genuine break of structure, not by a liquidity grab that snaps right back.