SFP is a type of repetitive pattern, that you can see occurring on all charts.
It is here to take out the liquidity from the market. Big players use this for filling big limit orders. To get filled on limit order, you need market order against it. If we know this fact, big players to enter a position they need to find a place with a lot of liquidity (market orders). SL order is executed by market order in most cases = so big players needs to find a place with a lot of SL sitting around this area in order to get filled on their limit order.
They simply need to find a place with a lot of SL, then move with the price to this zone, kick out all the retail traders => fill their big limit positions and move with a price to direction that they are looking for.
Retail traders like to place their SL above/below major high/low. With this being said, we know there is a lot of liquidity sitting. This is the zone where we expect SFP to occur.
SL:
If you get stopped out on long – it is a market short = market short is filing limit long.
if you get stopped out on short – it is a market long = market long is filing limit short.