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Stops building

Stops building is a market situation where traders tend to place stop loss orders at the same price level. This can create a large cluster of stop loss orders, also known as a stop loss accumulation. If the price reaches this level, it can trigger a cascade of stop losses getting executed, resulting in a sudden price movement in the opposite direction. This phenomenon is commonly observed in forex markets, especially during times of high volatility or major news events when traders may react similarly to the new information.

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