Support Level "Hunt the Stop-Loss" Strategy (Hunt the Stop-Loss / SFP)

Logical Explanation: This strategy is based on the "Swing Failure Pattern." When the price breaks below a key support level, triggering a large number of retail stop-loss orders (Sell Stops), but then quickly recovers. This indicates that large traders are using these stop-loss orders as liquidity for buying.

* Detailed Operation:

1. Lock in the previous low: Find a very clear swing low on the 1-hour or 4-hour chart.

2. Observe the lower shadow: The price dips below this low but does not continue downward; instead, it leaves a long lower shadow and quickly closes back above the previous low.

3. Entry: Go long at the moment the price recovers above the previous low.

4. Stop-loss: Set at the lowest point of that lower shadow.

Case Analysis:

BTC is oscillating around 60,000, with a previous low at 59,200. The price suddenly drops to 58,800, then recovers within 15 minutes to 59,300.

* Result: This is a typical "liquidation sweep" move. Going long at this point often leads to a strong short covering rally afterward.
$BTC