Short segment from a trading-focused YouTube video arguing that institutions intentionally trigger retail stop-loss orders to create liquidity. The speaker advises that good trades often occur after many retail traders have been stopped out, and that seeing prior stop-outs can signal the ‘right side’ of a trade.
The best trades occur after the masses have been stopped out, okay? And markets tend to move. And that's because the big fellas up there, they can't press the wee button and get in because there's just not enough liquidity there for them to get in size. So they have to, in fact, engineer a hundred thousand guys like you, sir, pull you one way, your stop loss gets hit. That, in fact, sets off a sea of liquidity for them to get in. So even if you don't have the strength, or what I refer to jokingly as the testicular fortitude to buy at the level, if you can get in, and you can see using your copier, you can see that lots and lots of people have been stopped out before you get in, then you're probably on the right side of the trade. The good trade is always a hard trade.
