#13 Stop Orders and Stop Runs

What Is a Stop Order?​

A stop order is an order that becomes a market order once a specific price is reached.

In simple terms:

• It is not active until price touches a level
• When triggered, it executes at market

Most stop orders are used as:

• Stop losses
• Entry stops (breakout entries)

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Buy Stops and Sell Stops​

• Buy stop → placed above current price
• Sell stop → placed below current price

Example:

• Price = 100
• Buy stop at 101 → activates if price reaches 101
• Sell stop at 99 → activates if price reaches 99

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How Stop Orders Affect Price​

When stops are triggered:

• They turn into market orders
• They add sudden pressure
• They can accelerate price movement

Many stops triggering together can cause:

• Fast moves
• Short spikes
• Temporary volatility

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What Is a Stop Run?​

A stop run happens when:

• Price moves into an area where many stops are placed
• Multiple stop orders trigger at once
• Price moves quickly through that area

This often occurs:

• Above recent highs
• Below recent lows

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Why Stop Runs Happen​

Stop runs happen because:

• Stop orders are predictable
• Liquidity is needed to fill large orders
• Markets naturally move toward liquidity

This is a normal market behavior, not manipulation at the beginner level.

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What Happens After a Stop Run​

After a stop run:

• Price may continue if strength remains
• Or reverse if stops were the main fuel

Order flow helps explain which one is happening, but beginners should only observe.

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Beginner Tip​

Do not think of stop runs as tricks.

Think of them as:

• Areas of high activity
• Temporary increases in volume and speed

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#12 Failed Breakouts in Order Flow

#14 DOM Basics