FOREX trading strategy / learn to use the "Stop hunting" technique- Part 2

Many FOREX fresh traders use too much leverage and with using high leverage come the opportunities for huge profits or even more massive loses. When trading with such high risk while using the full margin in your account we're talking in matter of doubling your account in 10 seconds or go bankrupt in 5 seconds. These kinds of traders, who represent most of the FOREX community, do not have the lavishness of nursing a losing trade for the long-term due to their extremely leveraged positions so most, of not all of them, use "stops" order / "stop-loss".

Stop order, in a nutshell, its more or less an insurance or security measure that came in action by giving an order to your broker to buy or sell a certain instrument when its price surpasses a particular point, investors usually use this system to minimize their loses nor when an investor is in any situation where he is unable to monitor their portfolio for an extended period. Bearing in mind that fact that most FOREX fresh traders use "stops" order / "stop-loss" give you an opportunity to step in and take advantage of this knowledge.
"Stop hunting" is the FOREX strategy who takes advantage of this knowledge on the best side, your side of course, by attempting to force some FOREX investors out of their positions by driving the price of a currency pair to a level where many high leverage investors have chosen to place their stop-loss orders (those fresh investors and traders known among the experts traders as the "weak longs"), by understanding the fact that the human mind naturally seeks order, most stops are clustered around round numbers ending in "00" (i.e. if the USD/CAD pair was trading at 1.1270 while increasing his value, most stop-orders would be take place in within one or two points of the 1.1300 price point rather than a random number like 1.1313).

Absorbing that fact alone is precious information (the price of a currency pair can experience sharp movements when many stop losses are triggered). It is a proven strategy with many possibilities of making a nice profit from this unique foreign currency market dynamic. One last tip for conclusion, act like the pro-traders and place your stops at less packed and more abnormal locations.