Kardec Trader explains why traders get stopped out before bullish moves. They enter on pullbacks with attractive risk-to-reward ratios (1:10 or higher), but price retraces to recent highs and hits their stops. Once those traders are shaken out, the market continues up.
The beauty about this model, the risk to reward is just ridiculous. Sometimes I'm talking like 1 to 10 plus. People are buying in this leg on the way to the upside. Let's just say this is a higher time frame. People are looking for lower time entries on this bullish leg from low to high. Now what happens is they want to see price back up to these highs. So price will come up, it respects and engineers, and it comes back and takes them all out. Anybody that was buying here, they're taken out. Anybody that was buying here, they're taken out, and then I'll take them all out and then it'll move bullish.
