The anatomy of a stop run and its reversal
Posted: Thu Oct 29, 2026 4:54 am
A stop run has a recognisable shape. Price approaches a level where stops are likely to cluster, pushes through it quickly, triggers the orders, and then reverses sharply because the burst of forced buying or selling has been exhausted.
On a one-minute chart, the signature is a long wick that pierces the level and a close back inside the range. On a tick chart, it looks like a sudden acceleration, a pause, and then a collapse in the other direction.
Reversal trades after a stop run are popular, but they come with real risks. If the break was genuine, the entry puts a position straight into the start of a trend. Confirmation matters, whether that is a close back inside the level, a drop in momentum, or a spread that normalises.
A conservative approach waits for the second candle. It sacrifices some of the move but avoids many false reversals.
The real skill is not catching the exact extreme but reading whether the break had backing or was just a quick sweep.
Two further details help. First, the size of the reversal relative to the spike is informative, since a spike that retraces completely in a few seconds is more likely to have been a pure stop event. Second, the behaviour of the spread during the move matters, as a widening spread suggests thin conditions that make the pattern less reliable.
What confirmation do you wait for before trading a reversal after a stop run?
On a one-minute chart, the signature is a long wick that pierces the level and a close back inside the range. On a tick chart, it looks like a sudden acceleration, a pause, and then a collapse in the other direction.
Reversal trades after a stop run are popular, but they come with real risks. If the break was genuine, the entry puts a position straight into the start of a trend. Confirmation matters, whether that is a close back inside the level, a drop in momentum, or a spread that normalises.
A conservative approach waits for the second candle. It sacrifices some of the move but avoids many false reversals.
The real skill is not catching the exact extreme but reading whether the break had backing or was just a quick sweep.
Two further details help. First, the size of the reversal relative to the spike is informative, since a spike that retraces completely in a few seconds is more likely to have been a pure stop event. Second, the behaviour of the spread during the move matters, as a widening spread suggests thin conditions that make the pattern less reliable.
What confirmation do you wait for before trading a reversal after a stop run?