Liquidity Distribution and Stop Clustering in Modern Markets

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Liquidity tends to cluster around:

  • prior highs/lows

  • consolidation edges

  • obvious technical levels

These clusters form because traders aggregate risk in predictable areas.

When volatility expands, these zones are cleared in sequences rather than randomly. This suggests liquidity is not evenly distributed but structured in layers.

The implication:
Markets do not move randomly — they move through structured liquidity removal.

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