Forex Traders Daily
Trapped Traders Daily Analysis
November 13, 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 is Monday, November 13, 2017.
And the chart I’m looking at this morning is a 30-minute GBPCHF, and I just want to draw your attention to this area of support. And in particular, the fact that it’s a really nice, clean level. It’s been hit several times, but it’s never violated the level. And when you’re looking for market manipulations, that’s what you want. You don’t want to see a level that’s sort of scruffy and being violated several times. It makes it difficult to read and also less likely that you’re going to be able to uncover a stop hunt.
Stop hunts are best when the level is clean because it’s a perfect starting point and you can understand whether or not there’s been a manipulation with ease, as in this case. And the idea obviously is every time price comes down to the level, you’ve got traders who are buying off the level. They’ll place stops above and below these levels. And if you get a little bounce just ahead of the level, again, people will place stops there. And it’s very simple to recognize the fact that there’s a lot of money, liquidity, sat there in the way of stops.
So, if you’re something big and you want to do some buying, buy low, sell high. They’re no different, big market participants. The problem that they have is they’re trading in massive size, so they need a way of transacting more efficiently because if they start buying at that perfect level along with everybody else, and when I say that is because if you’re looking at price action and a really nice level, what happens is it becomes very, very obvious for people to see, so everyone is trying to buy low, sell high.
But if everyone and you include the institutions in that, what happens is if they start buying where everyone else is buying, price is going to shoot away from the prices. Let’s say this is 100. 120. 140. Before they get all their business done. Imagine they’ve got an order to buy ten billion dollars and they attempt to buy where everyone else is buying at that perfectly defined level of support that there’s loads of eyeballs on. Then that’s a problem because they might try and attempt to get that ten billion on, but before they get it all on, they only get two billion on before price is now at 120.
And then they attempt to get the rest of the order on, and then they’ve only got four billion done and now they’re at 140. That can’t happen. It becomes too expensive for them. That’s slippage, and that’s why manipulations exist. So, what the bank needs to do is it needs to transact where everyone else is selling or being forced to sell so that they can get that buying done all in one go nice and efficiently, and then price is off to the races and they did their bidding in and around the price where they wanted to purchase the currency.
So, it all stems from the nature of the level itself. How pure is that level? And the more pure that level, the easier it is for them to manipulate, but also, thankfully for us, it’s easy for us to see where the manipulation is occurring. And if we can figure out if a stop hunt has occurred, which we can from there, it becomes a lot easier. Then we can do our buying along with the big banks. So, this is the situation in here.
It’s also I’ve highlighted this yellow area at the top. It’s also important to take a holistic view of the overall price action as well and just consider why else this may be a good location to buy. And if you have a level of resistance that’s been touched once, twice, thrice, then it’s a really smart idea to consider if you were a seller at that level and you had this broad. This is your chart and you can see that you’ve got this big old rangey price action like this. If you sold here, where would you take profit? Where would you potentially be looking to take profit?
On the other side of the range. Over here. Now, if you sold, you must buy to exit. So, what’s that creating? Demand down in here. So, not only do you have big banks buying, but also you have an extra bit of confirmation that there’s some buying occurring by virtue of the fact that people selling on the other side of that range are going to be exiting their positions for a profit, liquidating their sell positions. It’s always the opposite. If you’re a seller, you must buy to exit. If you’re a buyer, you must sell to exit. So, that’s going to create demand as well.
So, again, net-net it’s just adding to the fact that yes, you’ve got a manipulation, but also don’t miss out the fact that there are other traders trading for other reasons and they’ll be exiting their positions potentially, making money, and that’s a highly motivated position to find yourself in. It’s a high motivation to take profit. There’s also high motivation to exit losing positions and be stopped out. So, these are all cumulative effects that can add weight to your overall trading decision and ultimately the result that you are trying to achieve.
So, it’s just an added bit of confirmation. I hope you found that helpful. So, what you want to do is you want to look. Once you’ve realized that you’ve had a stop hunt, you want to delve down into this price action and look for some type of failure to follow through and then take the trade. Go long.
And if you’d like to join me in my inner circle to learn how to look at the markets in this way in more detail, then click on the link below. Share this video and hit the like button if you like it. Come and join me in my inner circle and I’ll see you on the inside. Take care.
Forex Traders Daily