S7 · Stop run fade

Price dives below an obvious low, triggers the stops that had piled up there, finds nothing but a void, and comes back. You never see the stops: you see the burst, then the absence of follow-through. The entry is taken on the return into the level, never on the wick. It is the setup that demands the most patience, because during the first second a stop run and a real breakout are indistinguishable.

The idea

Stops are not in the book: they only appear when triggered, as market orders, in a burst, in a book that is empty beyond the level. What separates the stop run from the breakout is what follows: after a stop run, nobody sells anymore, the delta flips, the resting band soaks it up and reloads, price comes back into the level. After a real breakout, deliberate selling takes over and consumes the band. The rule of this setup is therefore a rule of patience: stop run, then return, then confirmation close, in that order.