Hello fam, how are you doing?
The Fed cut rates this week by 25 bps, bringing the Fed funds rate to 4.00–4.25%.
I think with the current pace, I expect two more rate cuts this year (each probably 25 bps) if inflation and employment continue to weaken.
That was the news. Now let’s discuss how the market targets retail traders.
Practically, the market doesn’t target anyone. It’s like a river flowing at its own pace. Some learn how to ride with it, some don’t. But once you learn how to sail it smoothly, it’s a pleasant journey. Even if there’s a big storm, you can minimize the damage.
When the “hunt” happens, it’s from smart money that knows where stop loss clusters sit. The market thrives on liquidity. Retail traders provide it. Smart money hunts stop loss clusters as liquidity.
How are stop loss clusters created?
Herd mentality.
Have you ever noticed price spiking just to trigger your stop loss before reversing in the original direction? By original direction, I mean the one you had planned. So, your trade idea was right, but your stop loss got hit first.
Happened with me many times, still does.
Creating freedom through Crypto as a Community