Loading
Market Intelligence › Basic Terminologies
The concept of liquidity pools, without any conspiracy
Published by The Retail Trader · JUL 30, 2026 · Market Structure
Price coming right back after stops get hit is so common that people start to see a conspiracy in it. The reason is very simple, and it starts with your own behaviour.
To fill large orders you need orders on the other side. The most orders pile up where the most people place stops — just beyond the obvious levels.
So price travelling to those places is a natural mechanism, not the decision of any one player. Liquidity is there, so trading happens there.
Complete protection is not possible, but this helps:
• Place the stop a little away from the obvious level, not on it.
• Decide the stop's location from structure, not from your loss limit.
• If the stop by structure is too far away, reduce the position size.
• A very tight stop means getting knocked out more often, even when the view is right.
The job of a stop is to get you out when you are wrong, not to prove you right. If it keeps getting hit, the question is not about the stop — the question is whether the entry is happening at the right place.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics are changed by the exchanges, SEBI and RBI from time to time, so verify every number yourself with your broker or the official source.