Stop clustering
Technical analysisThe tendency for stop-loss orders to accumulate at the same obvious levels.
In plain terms
Below swing lows, at round numbers, under moving averages — every book recommends the same place, so everyone uses it.
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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The tendency for stop-loss orders to accumulate at the same obvious levels.
Below swing lows, at round numbers, under moving averages — every book recommends the same place, so everyone uses it.