Forex Traders Daily
Trapped Traders Daily Analysis
August 10, 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 Thursday, August 10, 2017.
And the trade we’re going to look at today is upon a daily chart. We’ve got a level here of resistance obviously been touched several times now. To the left we’d actually had a break of some prior resistance and what this was, was this whole area was a stop hunt. And from there, price then sold off.
Now, what we’ve had then, since then, is if you’ve got a level like that, there’s no way there’s any stops above a stop hunt itself because it doesn’t make sense. How can there be stops above a stop hunt? There’s only going to be a very, very small amount of stops above there because the vast majority of stops were above or below these structures that were preceding the stop hunt itself. So, Mr. or Mrs. Lucky may have sold that high, but yeah, there’s no stops there.
Now, what can sometimes happen is within that stop hunt you can start to develop a level slightly inside of a level. So, imagine you’ve got a range like this. What can happen is you can actually start developing levels inside of those levels, and that’s kind of what we’ve got in here. So, you get this buildup then. Price sells off. Traders believe that it’s going to follow through as it had done here, as it had done in here. So, they go short. It looks like it’s going to work. That’s the entry cheese. And then no sooner does that occur, then the market reverses on them. Sells off again at the level, again, inducing more people at the level, and then nails them.
So, the stops had been residing above that location in here somewhere. The stops got creamed, but not only that. As price did a break pullback and looked as if it was going to follow through, it drew more traders in and now it’s nailed the lot. So, if we get some type of pullback, this looks like a pretty good trade. So, let me just highlight that area without all the junk on it. There’s your level. And it breaks up through the level. It creates a problem for these people who go short, believing it’s going to sell off. Where would they place their stops? Just above that level.
But not only that. As price breaks up through the level in here, it then starts to induce people to go long. So, it looks like it’s broken out. It’s creamed everybody, because if you’re big and you need to do some selling, you need some buying to occur, be it forced or otherwise. So, this looks like a pretty good short if you get the chance on the underside of that level somewhere in here and that’s probably going to work out pretty nice and you’ve got this huge range to have a go at, so there’s lots of profit potential. If you just look at the nature of the market, it’s very indicative of how it’s been going recently. It’s sideways volatile, so you wouldn’t bet against that.
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