Excellent, teacher, you are right ✅

#انتبه

Beware of falling into the trap

I will clarify the method used by market makers to deceive traders using stop loss in a precise and simple way, with an illustrative example.

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1️⃣ The Trap Idea (Stop Hunt)

Market makers know where most traders place their stop loss, especially at:

Famous support and resistance levels.

Recent highs and lows.

Psychological levels (like 1.2000 in currencies, or 100 dollars in stocks).

What they do:

They suddenly move the price to reach these levels.

At that point, the stop loss of small traders is activated, and their position is closed.

This creates significant liquidity that they can use to enter their large orders at a better price.

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2️⃣ Practical Example

Imagine you bought a coin at a price of 10 dollars, and most people placed their stop loss at 9 dollars.

1. Market makers suddenly drop the price to 8.95 dollars → your stop loss and others' stop losses are activated.

2. After closing small positions, the price quickly rises to 10.5 dollars → market makers take profits, and you lose part of your capital.

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3️⃣ Important Notes

This happens frequently in cryptocurrencies and small stocks with lower liquidity.

New traders are often more susceptible to the trap due to placing stop losses at very obvious levels.

It is better to use a trailing stop loss or leave a safety margin from strong support/resistance to avoid the trap.

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