WHAT IS QM (SIMPLY)Quasimodo trading setup or QM is an advanced reversal pattern in which its formation signals the end of a trend, and most traders use its variants to improve trading results in the forex market.
If u don't understand it, there is high possibility for stop hunting.
u may heard HEAD AND SHOULDER pattern, yes?
QM is exactly HAD (head and shoulder) and u can trade it at: FL'S _ S&D ZONES and SR lines.
it is also a Great show for money back and u can short it at all.
What invalidates it?
only Do not ENG the first support.
Stophunt
Possible 3 hits to the high on BitcoinThis is a trade of my Paper Trading Training - 20netrust Trading Bootcamp
Bitcoin makes a possible third hit to the high. It's around 4pm. I consider the current move to the upside as a stop hunt. 3 is a psychological number and appears often on charts. I use this approache as in this case. We are still in the sideways range, but I think we will see the low of the range again.
Points of Interest on BITCOIN before FOMCI'm watching the price action closely today as we approach the CME gap at $61.5k.
We have not yet taken the previous high on the CME chart. The gap is still open a little bit. We've also accumulated some liquidity at about $57.2k. It is also wednesday, which is know for it's trend reversal.
BITCOIN BULL & BEAR SCENARIO FOR THE REST OF THE WEEKIn this scenario, we retest $58k and move lower to reach the low at $54.6k. These price moves should be watched closely as they can become volatile with falling stock prices and economic data. Today the JOLTS job openings will be released which could cause volatility. If the economic data turns out to be bad for the dollar in the next few days, the upside scenario could continue and we would re-enter the area where we are trading sideways.
TRADERS BEWARE! -- Possible stop huntI have already entered a short last week at the peak of the daily tf retracement, but here is an idea if some traders have missed out on an entry.
As you can see price bounced off the upper bounds of the daily tf channel with an RSI divergence. A cup and handle pattern appeared and there was a massive bearish engulfing candle that broke out of the CnH pattern.
It is possible that aggressive traders have entered shorts immediately once it broke down and placed their stops above the handle. Those retail trades are easy money for institutions and hedge funds to gobble up by pushing price past that red liquidity zone before entering their own short positions.
Once that happens, I will hop on the bandwagon.
What do you think about this idea?
BTC - Analyzing Order Blocks to Predict Liquidations / Stop HuntHello all,
I’d like to provide a visual representation of a method we can use to understand and predict stop hunts / liquidation moves on bitcoin - these mysterious and hard to capture phenomenon we all experience at seemingly random times.
Here I show blocks of orders - which I separate if we have a candle retracement overlapping the block. We can see this mass chain of red order blocks on my chart. What these are - are long position stop losses.
To understand the significance of these orders let’s break down the mechanics of these orders.
Long stop losses are:
1) Limit sell orders
2) Orders that don’t automatically fill if price is above the sell price (unlike limit sells)
3) Leveraged orders - using traders liquidity with a leveraged multiplier to increase position size
When dealing with “leveraged” order sizes - we can also leverage / multiply the speed, power, and velocity of chart movement as these orders are filled.
If we can assume an average leverage usage of 20x - We can speculate a price movement of 20x speed, power, and velocity.
With this information - we can look at bitcoin on the large time frames - in this case the multi-day. Identifying chart patterns, we can estimate the timing of movements by dividing the suspected speed of these moves by approximately 20. This allows us to speculate these very fast moves on bitcoin, which are essentially as simple as this description:
What are stop hunts and liquidations?
1) The result of retail traders stop loss orders being triggered and creating automatic chain reactions of order fulfillment
2) Order blocks being filled and triggered at multiplied speed and power
3) Not forced manipulation - but a natural occurrence of the consequence of a futures dominated market and large order gaps left intact on the chart
Looking back at bitcoin we can see this phenomenon happen time and time again.
1) Consolidation / long steady movements accumulating stop loss orders
2) A fast and large candle in the opposite direction as these stop loss orders are triggered and executed
Additionally we can understand the benefits of these pheonomons to the exchanges and market makers.
Liquidations return your entire trading position to these for profit companies - so there is a clearly defined benefit to executing these moves to the platforms we trade on. Further more - creating automatic movements that generate high speed and velocity triggers an error known as slippage - price moves so fast that it doesn’t allow adequate time for the stop loss order to execute before the liquidation of a leveraged trade is triggered first - resulting in liquidation with a stop loss in place.
HOPE THATS HELPFUL AND GOD BLESS
XAU Weekly - BearishThis Week we Say OANDA:XAUUSD was Super Bullish, But is It?
gold has Engineered Liquidity up and Down, I believe its going up to Hit Retail Stop loss and then Revert to go Down .
I have noted Levels that I am interested in Chart
Another Confirmation : If you Check #Gold Seasonality, Normally OANDA:XAUUSD is Bearish in October and November !
Disclaimer : this is Just Technical Analysis, You Should never use this information for real Trading, Do your own Research.
Sincerely,
Sobhan JTN
Stop Hunting: How Not to Fall into a TrapIn the world of trading, knowledge is power, and being aware of the strategies employed by market manipulators can be the key to safeguarding your capital. One such manipulative practice is stop hunting, which targets stop-loss orders in an attempt to drive prices in a particular direction. In this article, we will delve into the concept of stop hunting, explore how it works, and detail the strategies you can employ to protect yourself from becoming a victim of this practice.
What Is a Stop-Loss Raid/Stop Hunt?
Stop-loss hunting, sometimes written as SL hunting or termed a stop-loss raid, is a manipulative practice used by some market participants to intentionally trigger stop-loss orders and drive prices up or down. The goal of stop hunting is to force other traders to sell or buy, creating a domino effect that drives prices even higher or lower. Large institutional investors, like hedge funds, investment banks, who possess the necessary resources, often employ this strategy.
Stop raiding can wreak havoc on both traders and investors, potentially leading to substantial losses and undermining market efficiency. To protect your trading capital, it's crucial to recognise this tactic and adopt measures to avoid stop hunting.
Stop Hunting and Stop-Loss Orders
Stop hunting takes advantage of stop-loss orders. To prevent losses, traders and investors often place these orders with a broker, instructing them to buy or sell an asset when it hits a predetermined price. In other words, traders use stops to limit losses by automatically closing their position once the price of an asset reaches a certain level.
Stop-loss orders provide traders and investors with the convenience of limiting losses without constantly monitoring the market. However, this benefit comes with a caveat: vulnerability to stop raiding. Cunning market manipulators use a variety of techniques to trigger these orders, which can result in frustration for unsuspecting traders and investors.
To fully comprehend how stop-loss orders can be exploited to manipulate the market, it's vital to understand how they function. As mentioned, when a trader places a stop order, they essentially direct their broker to execute a trade once the security's price reaches a specific level. For instance, if a trader acquires a stock at $50 and sets a stop-loss order at $45, the broker will automatically sell the stock if its price dips to $45 or below.
Stop-loss orders serve as a valuable tool for traders and investors, allowing them to cap their losses. However, market manipulators may also use them to drive markets up or down.
A large institutional investor, for example, might place a hefty sell order at a level where numerous stop-loss orders lie. This action could trigger those orders, inciting a flurry of selling that drives the asset’s price even lower. Consequently, the institutional investor can purchase the security at a lower price, potentially generating substantial profits.
Identifying Signs of Stop-Loss Hunt
Recognising stop hunting is tricky, as it typically occurs behind the scenes. However, there are some signs to watch out for that may indicate that a stop-loss raid is taking place.
The most obvious sign is a long wick that reaches above nearby highs/lows before the candle closes back in its current range. Market manipulators know that stop-loss orders rest beyond these highs/lows, especially if there are equal highs/lows or a “strong” support/resistance level exists, so these wicks may indicate that stop-losses are being triggered. These wicks most often look like the hammer or shooting star candlestick patterns.
It's also worth noting that stop hunting may be more prevalent during times of high market volatility or low liquidity, as these conditions make it easier for manipulators to move the market. Be extra vigilant during such periods to protect your trades from potential stop hunting tactics.
In terms of your own trading, if you continually notice that your stop is triggered before the price takes off without you, then you may be a victim of stop raiding. If that’s the case, then it’s a good move to consider how tight you’re placing your stop-losses, and employ one of the strategies below to mitigate the chance of your stop being hit.
Stop-Loss Strategies to Avoid Stop Hunting
While it is important to be aware of the potential risks of stop hunting, there are steps you can take to avoid being targeted by this practice. One of the most effective ways to protect yourself from stop hunting is to use stop-loss orders strategically. Here are some strategies you can use to avoid stop hunting:
Strategy 1: Identifying Areas of Stop-Loss Orders
One way to avoid being targeted by stop hunting is to identify areas where there are likely to be a large number of stop-loss orders. You can do this by analysing charts and identifying key support and resistance levels and trendlines. When prices approach these levels, there is often a cluster of these orders placed just below or above these areas.
By identifying these areas, you can avoid placing your stop-loss orders at these key zones. Instead, you can pinpoint levels that aren’t likely to be breached, which may reduce the risk of your orders being targeted by stop raiding. Generally speaking, setting stops above/below areas that caused an impulsive move is a decent place to start.
Strategy 2: Avoid Round Numbers for Stop Losses
Another strategy to avoid stop hunting is to refrain from placing your stop-loss orders at round number prices. For example, if the current price of a stock is $50, you may be tempted to put your stop-loss order at $49 or $51. However, market manipulators may target these levels in order to trigger a wave of selling or buying.
Most of the time, it doesn’t make sense to place stop-loss orders at arbitrary prices. Choose your stops based on technical factors and the probability of the level being reached. You could even choose a fixed percentage as long as you confirm the validity of the stop-loss with technical analysis.
Strategy 3: Use ATR to Measure the Stop-Loss Level
The average true range (ATR) is a technical indicator that can be used to measure the volatility of a security. As the name suggests, ATR is calculated by taking the average of the true range of a security over a specific period of time. Statistically speaking, an asset is unlikely to deviate from its ATR.
By using ATR, you can set your stop-loss orders at a level that considers the security's volatility. This may help you avoid setting your stops too close to the current price, which could make them susceptible to raiding.
For example, if the current price of an asset is $50 and the ATR is $2, you may want to set your stop-loss order at $48. This would give the price enough room to fluctuate without triggering your order. You’ll find the ATR indicator and dozens of other tools waiting for you in the free TickTrader platform.
Takeaway
In summary, stop hunting is a manipulative practice employed by some market participants, such as large institutional investors, to intentionally trigger stop-loss orders and influence market prices. There are even theories that brokers assist these participants in identifying clusters of stop-losses and engage in stop hunting themselves. However, Electronic Communication Network (ECN) brokers directly connect traders with liquidity providers and remove any conflict of interest.
FXOpen is a Trusted ECN broker with your best interests at heart. If you are ready to start trading, why not open an FXOpen account? You’ll be able to enjoy low-cost trading, ultra-fast execution speeds, and the confidence that you’re partnering with Traders Union’s Most Innovative Broker of 2022. Happy trading!
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
How to know when you are wrong and what to do nextThe feeling of ever admitting that one’s action is wrong is something many people never acknowledges, outside the works of trading, you get to see that even in a bilateral misconduct between two sovereign nations, it’s always difficult or maybe impossible for one of those countries to accept that there were at fault( being wrong), it goes on in every aspect of human endeavors, No one wants to take the blame.
Now let’s take a case study into the current invasion of Russia into Ukraine, you will get to see that none of the presidents according to their speech has accepted to be wrong in their actions.
Russian president Vladimor Putin while delivering his annual state state of the nation’s speech at the Gosting Duor conference center on February 21, 2023 did in his statement puts the blames on West and Ukraine for provoking conflicts while the president of Ukraine while replying to his speech did debunked the allegations of the Russian President. So the big question now is who is to be blamed? Who is Wrong?
It’s the same thing that applies to trading, so many beginners and advanced traders can’t really beat their chest to tell when their analysis becomes invalid so that’s the reason am here to fix things up.
What is wrong in forex?
I won’t quote any dictionary or trader but I will simply put it this way that wrong in forex is a level or stage where you find PERSONALLY that the trade setup you had plan to trade or that you had traded is no more valid, useful or won’t be profitable if traded.
The main keywords there are personally, profitability and traded. As far as wrong is concerned, it has to do with one accepting to the fact that a signal won’t yield profit because it had passed a particular level or structure.
How to know that you are wrong
I will like to drop some factors that will help you know that a setup is soar or is wrong.
You have to set up parameters before entering a trade: wheather you use pending orders or market execution, you shouldn’t rush into a trade because of how attractive or how sweet looking the candles are being printed on the chart without knowing firstly where you will consider being wrong in the market. For me, since we are in a very sensitive environment while trading, then I feel identifying where your wrong zone would be is more important travel where your profit target would be.
Use a well backtested strategy that you trust: Using a strategy that you trust would always enable a trader to quickly identify certain trade management levels. Let’s take a case st udy of a driver who uses one route everyday while going to and fro work at night, then unluckily for him, while returning from work at night on a faithful day, his head light malfunctions and then refuses to work, you will notice that with the aid of streetlight, you will be amazed that even under such mysterious circumstance, the driver would still manage to scale through the road successfully back home. Now you will ask how? This is because he has been using this route repeatedly and knows where there could be portholes and bombs so he would avoid those areas. Same thing applies with trading, when you trade a particular strategy day in day out, you will always at the slight of a fingertip be acquainted with where to identify your wrong level(stoploss) and you right level (take profit).
Be psychologically ready to accept that you are wrong: This is one of the major problems encountered by traders because most traders even when their levels or an intending structure they acknowledged as their wrong level are taken out (those who believes in closing trades manually), they rather believe that things could get better (trades will surely reverse) so they keep holding their losses till it gets out of control. As a trader, you must be ready to boldly acknowledge that a setup you saw due to some factors is wrong and then immediately close it without second thoughts.
Some technical tools and indicators to help you be aware of being wrong
Thank God for the recent innovations that has been seen in the world of trading. With this, trading has been made more smart and rewarding because of there sophisticated tools and indicators that have been made available. Here are some of the tools that can help you identify when you are wrong
Support and Resistance indicator by Luxalgo
As we all know, trading is all about identifying key levels and structures which turns to become support and resistance levels. This indicator by Luxalgo makes it more easy to quickly identify market structures and trends on each timeframe so one could use the indicator to set a particular structure which will be used as his or her wrong level.
ATR indicator
You(Mindset) indicator
This indicator surpasses all other technical indicators and tools because it has to do with the trader itself. Having to make use of those mentioned indicators is all dependent on you. This indicator determines the progress that you make in the industry.
After Losing, What Next?
There are some traders that would love to acknowledge being wrong in its dealings( setups or analysis) but their biggest question would be “After I agree that am wrong, what next should I do”?
According to a book titled “Mastering trading psychology “ written collaboratively by Andrew Aziz( founder and CEO, Peak Capital Trading Founder,Bear Bull Traders) and Mike Baehr( Chief training officer , Peak Capital Trading Couch, Bear Bull Traders), one of their est technical analysis trainee who they had in mind to reserve as their full time trader after encountering a loss( wrong) had this to say and I quote “This is embarrassing. I was doing so well alternating between real and simulator this whole week. These were my results:
Monday: 4 green trades out of 4
Tuesday: 3 green trades out of 5 trades
Wednesday: 1 green trade out of 1 trade
Thursday: 2 green trades out of 2 trades
Total: 10 green trades out of a total of 12 trades: nice profits, and feeling on top of the world!
And today it all fell apart in spectacular fashion. I traded like a maniac and finished with a huge loss. It was all a blur, but this is my recollection of the events in question:
After two small losses 10 minutes after the open, I was a bit shook. Then on my 3rd trade, I made a hotkey mistake and doubled up my position rather than exiting. That ended in a huge loss. Shortly after that, I made another hotkey mistake and took another big hit. I was a psycho- logical mess. Rather than walking away, I went on a rampage. I started trading stocks not in play (JD, BABA, MU), and was reckless and vengeful. I said to myself,
‘Fuck it, let’s go!’ (literally out loud) and fired away at my hotkeys like there was no tomorrow. By 10:30 AM ET, I was 0 for 7. By noon, I had made 13 trades. When it was all said and done, I had made 20 trades total (not tickets, but trades). Only 2 of them turned out to be winners. Talk about lack of self-control...
I violated every single rule that I had been following reli- giously all week. I stopped caring about those A+ setups and traded anything that looked marginally good. And since SPY was a roller coaster today, I got destroyed by questionable entries and ‘make-believe’ strategies. I kept trading the same stocks over and over, even after admit- ting they were not in play. I was trading like it was going out of style. I thought I could outsmart the market and get back at it. It wasn’t even about the money anymore. The losses were a foregone conclusion and had evaporated to currency heaven.
The sad part about this whole tirade was that I knew I was breaking the rules while violating them—and I didn’t give a damn about it. In the moment, I turned into the Incredible Hulk and everything switched to autopi- lot mode. I smashed at my keyboard like a savage. Everything I had learned up to this point in my (short- lived) trading career was thrown out the window. I had literally unleashed an animal that I had no control of. I’ve never experienced such poor self-discipline in my normal life—ever.
Today was a reminder of how fragile the trading mindset can be. All it takes is one moment—a FILG one —to send you spiraling out of control. All of these rules and checklists I had been adhering to were useless in the face of such madness. They were nothing but delicate paper walls I had erected to trick myself into believing that my emotions were in check. They came crumbling down under the slightest pressure. It was all an illusion; I was delusional.
I have a lot of reflecting and contemplating to do this weekend. I might take a break from trading to rebuild my psyche. Maybe I’ll visit a monastery to cleanse myself of all these trading sins. But first I need to forgive myself. Now I’m just rambling like a fool.
Thanks for reading, and remember—don’t trade like a crackhead”.
I know being wrong hurts but here are the remedies to do in such circumstances.
Shut down your computer sets for that day: The is a saying that “He who doesn’t bet the farm on one trade lives to trade another day. Setups as far as trading is concerned is a repeatable outcome, as far as your strategy has an edge, then your setups will always come. Move away for that day and return the next day.
Have a source of happiness: It’s not just shutting down the system but what do you do after putting the system off, you must as a trader have something that brings happiness to you naturally, it could be hanging out with friends, playing soccer or having some cool time with your kids or maybe taking some yummy ice cream or whatever. Personally when bad days or wrong days usually comes around, I do play virtual games and this just has its own way of making me happy. After shutting down, make sure you locate your source of happiness immediately.
Return like a baby the next day: The mind of a baby according to research is like a flowing river, it always keeps moving without thoughts of what happened previously, your mind as a trader should be like a baby. You should learn from your mistakes but don’t let it weigh you down. Resume office the next day with joy forgetting what occurred the previous day. Take trading decisions according to your strategy and let the trades play out.
Conclusion
The key take away from this write up is learn to adjust, learn to accept your wrongs and act accordingly to it. Digest this my write up efficiently and still check out for other other resources I will be dropping soon. Always try as much as possible to see how you can improve both yourself and your trading carrier everyday of your life.
SEE YOU AT THE TOP!!
Understanding How Forced Liquidations / Stop Hunts are DesignedIn this write up I will explain how we can extrapolate our knowledge of stop loss orders to understand the automatic execution of what are known as forced liquidations or stop hunts.
We will understand the mechanics of how Bitcoin can achieve such speed of movement and how to predict these events by reading the charts with a unique perspective of pre-design of these events.
Our first goal with viewing the Bitcoin chart is to remain objective and without personal bias. We should have no emotional attachment or opinion when it comes to trading and asset effectively.
Due to the lack of regulations in the crypto market and our knowledge of for-profit ventures benefiting off the liquidations of traders positions, we can strive to align ourselves with these forces so long as we decide to actively trade this market.
We can begin by understanding what drives Bitcoins price up and down. Unlike equities that have relational value to real world output via job creation, product sales, infrastructure, P&L reports, etc - Bitcoin is in a different class of assets lacking intrinsic value and belong to what I like to call “perceived value assets”. This means the evaluation of price is based on an agreed upon value, defined only by liquidity flowing into and out of the asset.
This creates the “volatile” nature you hear about in crypto assets. Prices are very fluid and move up and down extraordinarily fast at specific times that may seem random.
The executable actions that impact the price is the fulfillment of orders; buys and sells. Where things get interesting is in understanding stop loss orders and their accumulation.
Stop losses are effectively limit orders that reverse the position of traders by returning liquidity into the Bitcoin market cap or by pulling it out of the market cap; depending if the stop loss is for a LONG or SHORT. While it may be hard to grasp how the futures market has a direct effect on Bitcoins price, we must understand that in futures we are simply instructing Market Makers what to do with their assets by borrowing the leverage to our margin and in effect they will sell or buy Bitcoin. The stop losses of these trades are the direct opposition and not only is it in the Market Makers interest to ensure you aren’t taking money from them, attacking the stop losses and liquidations of your trades has a factual benefit to both the exchanges and market makers who collect your position margin once liquidation level is hit.
Understanding this we can look at the bitcoin chart and make sense of accumulation of stop loss orders; shown here in my boxes (green are buy orders / short stops, red are sell orders / long stops).
We can gauge for ourselves the amount of stop losses accumulated and predict the speed of bitcoins movement and clear interest in setting up a two way liquidation.
Now why would a two way liquidation of such magnitude occur?
The answer is to do with the US Dollar just underneath a major bearish retest on the 3 month chart. An entry into a bull market is would be a key time to execute a dramatic liquidation on Bitcoins chart, as we see here there is a chain reaction ready to hit both the top and bottom level I have marked.
As the stop loss orders are hit, there is accumulating power sent into the next level, which creates exponential speed of movement and this is what we like to call “stop hunts”.
Hopefully this article is helpful and allows you to understand how we can decipher the chart in a way that allows us to forecast out these movements and ideally prove that these “unpredictable” movements are in fact quite predictable after all.
- Dick Dandy
US30 - 25th Aug - Bear or Bull momentum expected?What a week - Us30 stayed within a range majority of the week until yesterday..
If you followed my Analysis posted on Monday you would see that I gave all areas of interest and probability of where the market most likely will go to
Yesterday the Sellzone was triggered(4h flipzone) and we caught the entire move after NYC Market opened. Total 600 ticks, +1,73%, Zero drawdown..
Today is interesting (apologies for the messy charts)
- Monday, Tuesday, Wednesday buyside liquidity swept
- 4hr flipzone respected
- 4hr eq lows taken and 4hr SP taken
- PWL low taken
im expecting the market to close on the Liquidity Gap created and push higher for the correction.
- We may also see price push towards PWL and selloff again
What goes down must come up and vice versa. Powell normally causes this.
Be on the lookout - i will update if my rules are met.
Long PositionKing W. Harbmayg's Journal Entry #25
Primary Position
1. Pair & Position:
GBPUSD— 1:30 RR
Long—
according to the Harbmayg Schematic, the market has successfully:
a. presented the weekly template
b. triggered the interest zone
c. printed rejection structure
2. Performance: (1 out of 5)
Confidence— 5
Discipline— 5
Execution— 5
US100 - Can we catch some pips to the downside?Hi traders,
Sell on US100... Why?
1. Divergence on the 4 hour.
2. Strong fake out rejection on the 4 hour.
3. Big fakeout rejection to the upside on the 4 hour.
4. Broke the last low on the 1 hour.
US100 could possibly do a small stop hunt to the upside before dropping further down.
Let's anticipate!
What do you think of this analyses?
Let me know!
Have a nice trading day all!
Short PositionKing W. Harbmayg's Journal Entry #23
Primary Position
1. Pair & Position:
EURUSD— 1:20 RR
Short—
according to the Harbmayg Schematic, the market has successfully:
a. presented the weekly template
b. triggered the supply zone
c. printed rejection structure
2. Performance: (1 out of 5)
Confidence— 5
Discipline— 4
Execution— 5
3. Result: $
4. Improvement:
📈Bitcoin may retest 27274 level📉BINANCE:BTCUSDT
COINBASE:BTCUSD
Hey everyone, first take a look at my previous ETHUSDT analysis and position.
Bitcoin may experience growth to 27274. The trend is still bearish, and the price takes another step for further correction with each rise, specially near stop-hunt level.
P.S: If the price stays above 61.8 fib level, bitcoin can go higher even above 27500 level. Don't forget to risk-free your position.
Please share ideas and leave a comment
let me know what's your idea.
CrazyS✌
Algorithm vs Liquidity In Determining PriceBased on my research into IPDA and algorithms, central banks, trading firms/hedge funds, and smaller banks use execution algos (EAs) for trading with different objectives. Small banks use EAs to split large parent orders into smaller child orders generally in one direction, buy or sell. These orders are executed separately over a period of time to either open or close positions.
Trading firms and hedge funds use opportunistic EAs to buy and sell to turn a profit.
Central banks use market making EAs to buy and sell in order to bring liquidity providers net positions back to or close as possible to neutral. (This sounds like equilibrium). Central banks use EAs cautiously and only during their main trading hours and always under the supervision of people.
A key reason for using EAs is to access multiple liquidity pools in order to reduce market impact or footprint.
This is similar to a parent child relationship between Central Bank algos and other smart money players, where smart money (including central banks) accumulate orders in consolidation before expanding price, then the central bank algo pulls them back to equilibrium like a parent calling their child that has strayed too far away. Then they rinse and repeat.
I am of the opinion that with the function of central bank algos to facilitate the provision of liquidity with minimal market impact, that liquidity itself is the determining factor in price delivery.
Algos used by smart money break up large orders in to smaller chunks and funnel them to multiple liquidity providers (market makers) for fulfillment since forex is decentralized. If there is enough liquidity (buyers and sellers) to open/close positions at a certain price then it is done at that price. When liquidity is low or there aren't enough buyers and sellers at the current price, the market maker's algo has to fill these received orders where there is enough liquidity based on available buyers and sellers. The algos move very quickly which can deplete available buy or sell orders rapidly leaving unfilled counter party orders in its wake which defines liquidity voids (imbalance).
Algo adjustments to meet buyers and sellers at their price is perceived as a stop hunt but it's just economics.
Example: If I must sell something and I want to sell it for $100 but no one is willing to pay $100, I would have to look for buyers willing to pay $95.
If I must buy something and I only want to pay $100 but the seller is charging HKEX:105 , then I have to pay $105.
Either the buyer crosses the spread to meet the seller or the seller crosses the spread to meet the buyer. When there are limit and stop orders the buyer or seller isn't moving so the liquidity provider has to move to meet these buyers/sellers at their limit or stop order prices (including orders left behind in liquidity voids).
When the orders trigger and price reverses it takes out both buyers and sellers so people call it a hunt, but I'm sure it is intended for actual institutional trading entities because retail traders such as ourselves can not provide the liquidity to be on the other side of every order placed by institutions.
We are simply collateral damage in the battle between financial titans seeking to provide and tap into liquidity.