I've heard it remarked that modern multi-billion funds are involved in systematic "chart-painting" (i.e. pushing through stop-levels), then covering and possibly even reversing a profitable trade. I certainly have seen plenty of that happening in open-outcry era where locals sometimes managed to simply "yell the market" through a level of known stops, without ever doing a single trade! And yes, it can be accomplished even in the most liquid markets if you know the right spots and have enough capital to satisfy the limit orders resting there. A stark example can be found in EUR/USD trade 12/18/08 and again 1/13/09.

Following the 2008 collapse 1.6040->1.2329, followed by six-week rectangle consolidation, EUR rocketed at record-pace toward the 61.8% retracement mark of 1.4622. But on 12/18/08 it managed to slice through the level, peaked a full-figure over at 1.4717 — and swiftly reversed! Now today, it punctures 1.3241 level = 61.8% retracement of 1.2329->1.4717 run only to swiftly reverse precisely full-figure under at 1.3141. I wasn't much surprised: my charts were marked corresponding to this idea well in advance.

I'll be on look-out for developing situations in this regard.





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