During major economic releases like CPI and FOMC, market makers pull liquidity and bid-ask spreads widen dramatically. When traders hit the market, they get filled at whatever limit orders remain, creating sharp price spikes that look like stop-loss hunts but are just the result of a liquidity vacuum.
This is exactly what happens in the market every single day during CPI, during FOMC. A lot of people doesn't know it, but they will delete this liquidity from the book and they will just leave it at the market. So there might be, sorry, one sell limit here and one sell limit here, super low because no one is willing to be a market maker here, neither the firms or other traders or HFTs. Now, if you're Riz, if you want to buy market and you're going to be filled here, right? Spread is wide. The spread between bid and ask, best bid and best ask is wide. So if the candle was here, what will happen? Kaboom. And then I might sell. And where will I get filled? Filled over here, wherever there's at least one buy offer. So the candlestick at this point completely reverse, leave a big spike above here and turn red. And ICT traders will say, "They hunted for stop losses." You know, it's not hunting for stop losses. It's hunting for limits because we need to get filled now. That's all there is.
