Stop Hunts [MK]

How it works

The indicator identifies liquidity zones by tracking two primary methods: pivot points and previous candle high/low levels. Pivot points are created by identifying higher highs and lower lows within a price trend, with the number of candles required to form these points being adjustable in the script settings.

Previous candle high/low levels are also analyzed as potential liquidity zones. When price moves beyond these levels, it can tap into accumulated orders and stop losses, potentially creating opportunities for market reversals or continued momentum.

Why it may be useful

Understanding liquidity zones is crucial for traders as these areas represent significant concentrations of market interest and potential trading activity. By identifying where traders are likely to have placed their orders and stop losses, traders can gain insights into potential market movements and price reversals.

The indicator helps traders visualize these critical areas, providing a strategic perspective on market dynamics and potential entry or exit points. It serves as a valuable tool for understanding market psychology and identifying high-probability trading opportunities.

When to explore it

The indicator works best when used across different timeframes, with pivot point stop hunts recommended for lower timeframes and previous candle stop hunts for higher timeframes. Traders should carefully consider their individual trading style and adjust the indicator's settings accordingly.

It is most effective when combined with other technical analysis tools and should not be used in isolation. Extensive backtesting is crucial before applying the indicator to live trading accounts, and traders should develop a comprehensive understanding of the stop hunt concept.

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