Forex Traders Daily
Trapped Traders Daily Analysis
August 11, 2017
Hello traders, Mark Chapman here, the creator of the trademarked Trapped Traders Concept. Welcome to today’s Trapped Traders Trade of the Day Analysis. Today’s date is Friday, August 11, 2017.
And the trap we’re going to focus in on today is one that I refer to as a structure failure trap and also a rat trap. And there’s another trap in there. It’s a semi-candle flip trap. Not quite one, but it is trappy. The way this works is you have a definite move in a certain direction and perhaps you have an overall bias that is counter to that. So, if, for instance, on a daily timeframe, as an example, or a four-hour timeframe, you want to be long this pair, but on the short-term it’s been retracing or selling off.
This is a situation when you should be thinking well, I’m looking for actually counter moves to occur and then some traps to unfold after that. And that’s what we essentially get. We get a very directional move to the downside and you get a situation in here where you’ve got a bit of a level and price breaks down through that prior level of support, and the idea is that then it becomes future resistance in the eyes of those types of traders. Pulls back and then starts to sell off, and that’s the key part. It starts to sell off in here as well. Would’ve looked like it was selling off in real time. It would’ve been a negative candle.
And that is what I often describe as entry cheese. It gets the trader in. Tempts them at the hard right edge. If you just think about this scenario in a real time mindset, so this is supposed to be the hard right edge. And the hard right edge. What is the hard right edge? It’s just where price is in the here and now. This is the hard right edge. What’s coming next into the future. Who knows, but this is where price is now at the hard right edge.
Well, this is what price was like at the hard right edge in that moment. And what did it look like? Well, it looked like it was selling off. Where would you place your stop if you were that type of trader? Above this level. Would an engulfing candle be tempting enough to get you to pull the trigger to believe that this trend is going to continue? I would suggest that that’s enough to get those types of traders involved and excited. So, ultimately they come in. They take some risk. They go short. They go short obviously anywhere in there. And then, since then, that decision has been proven to be a wrong one. They’re caught on the wrong side of that market now or either stopped out. And if you get a pullback, this looks like a pretty good place to get long.
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