Gather In The Stops

Stop orders are standing instructions to buy or sell a stock at a certain price.

You own shares in MSFT. They're sitting at $110. You're going to lunch and don't want to get screwed if the bottom drops out of the market. So you put in a stop order to sell at $100. If the price falls to $100 while you're away, your computer (or your broker, depending on how you have the order placed) will automatically sell the stock at the set price.

The technique of "gather the stops" takes advantage of these pre-set breakpoints. The goal is to manufacture downward momentum by tripping the stops. (This technique, by the way, is not considered above-the-board trading. It's definitely a grey area situation, drifting into out-and-out market manipulation.)

The process kicks off by you driving the price of a stock lower. You goal is to trigger the stop orders on the way down. When these go into effect, it creates more selling pressure, which you exploit to push the price further lower, with an eye on reaching the next stop-order point. You're creating a snowball effect, where the sell orders build up to sink the stock's price.