Stop hunts versus ordinary volatility

[Amanhasnoname]

Every scalper has felt it: the stop gets hit by a single spike, and price then moves exactly as originally expected. The conclusion is that the broker hunted the stop.

Sometimes there is a mechanical explanation. A spread widens, the bid or ask touches the stop level, and the order triggers while the mid price barely moves. That is not a hunt, just a cost of the quoting model.

Other times, the stop sat at an obvious level, like just below yesterday's low, and ordinary market flow ran through it. Many traders put stops in the same places, so liquidity sits there.

Telling the difference matters. If the spike came with a wide spread, the issue is broker pricing. If the spike happened with a normal spread, the issue is stop placement.

Check the ask line and the spread at the moment of the stop-out. That alone clarifies most cases.

A stop placed a few pips past the obvious level with smaller size often survives more of these.

Has the spread data ever convinced anyone that a suspected stop hunt was actually just a wide quote?