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TRAP

Triangle Pattern Trading: A Trap for NewbiesThe triangle pattern is a popular chart pattern that is often used by technical analysts to identify potential breakout opportunities. However, traders should be aware that the triangle pattern can also be a trap for unsuspecting beginners. Why the Triangle Pattern is a Trap One of the reasons why the triangle pattern can be a trap is that it is a very subjective pattern. There are no hard and fast rules for identifying a triangle pattern, and what one trader might identify as a triangle pattern, another trader might not. Another reason why the triangle pattern can be a trap is that it is a very common pattern. This means that there are many opportunities for traders to trade this pattern, which can lead to overtrading. Overtrading is a common problem for beginners, and it can lead to significant losses. Smart Money Traders and the Triangle Pattern Smart money traders are aware of the fact that the triangle pattern can be a trap for beginners. They will often use this pattern to their advantage by creating false breakouts and trapping beginner traders into losing positions. Here are four examples of how smart money traders use the triangle pattern to trap beginners: NEO: formed a bullish triangle pattern. However, the price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. RVN: Rformed a symmetrical triangle pattern. The price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. DYDX: formed a descending triangle pattern. The price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. TRX: formed a bullish triangle pattern. However, the price broke out of the pattern in a fake breakout and then reversed sharply, trapping many beginner traders who were buying the breakout. How to Avoid the Triangle Pattern Trap There are a few things that traders can do to avoid the triangle pattern trap: Be aware of the subjectivity of the pattern. There are no hard and fast rules for identifying a triangle pattern, so traders should be careful not to get too caught up in trying to identify this pattern. Don't overtrade. The triangle pattern is a very common pattern, which means that there are many opportunities to trade this pattern. Traders should be careful not to overtrade this pattern, as this can lead to significant losses. Be aware of smart money traders. Smart money traders will often use the triangle pattern to their advantage by creating false breakouts and trapping beginner traders into losing positions. Traders should be aware of this and be careful not to fall for these traps. Conclusion The triangle pattern can be a useful tool for identifying potential breakout opportunities. However, traders should be aware that this pattern can also be a trap. By understanding the reasons why the triangle pattern can be a trap, and by taking steps to avoid these traps, traders can protect themselves from significant losses.
Education
by Yaroslav_Krasko
4
Turning Traps into Profitable Opportunities ! TOP 3 PATTERNSTrading traps are a common occurrence in the cryptocurrency market. They can be created by a variety of factors, including market manipulation, technical analysis, and psychological biases. While traps can be dangerous for traders who are not prepared, they can also be a source of profit for those who know how to trade them effectively. In this article, we will discuss three common trading traps and how to trade them profitably. We will also discuss how traps are created and how they can be used to your advantage. What Are Trading Traps? Trading traps are false movements in the price of a cryptocurrency that are designed to trick traders into taking a position in the wrong direction. They can be created by a variety of factors, including: Market manipulation: Market manipulators may create traps to trick traders into taking positions that are in their favor. For example, they may buy a large amount of a cryptocurrency to drive up the price, and then sell it off quickly to create a sell-off. Technical analysis: Technical analysts may use traps to take advantage of traders who are following technical indicators. For example, they may create a false breakout of a support or resistance level to trigger stop-loss orders. Psychological biases: Psychological biases, such as fear of missing out (FOMO) and fear of loss (FUD), can also lead traders to fall into traps. For example, a trader who is afraid of missing out on a potential bull run may be more likely to buy into a false breakout. In the example above, LINK was trading in a horizontal range for several months. The price then broke below the lower range boundary, which was a sign of a potential bear trap. However, the price quickly reversed and re-tested the lower range boundary. This was a good opportunity to enter a long position, as it showed that the trend was still in place. How to Identify Trading Traps There are a few things you can look for to help you identify trading traps, including: Volume: A sudden increase in volume can be a sign that a trap is being set. This is because market manipulators or technical analysts will often need to buy or sell a large amount of cryptocurrency to create a false movement in the price. Price action: A false breakout or fakeout is often accompanied by a sharp reversal in price action. For example, a false breakout of a support level may be followed by a sharp sell-off. Technical indicators: Some technical indicators, such as the Bollinger Bands, can help you identify potential traps. For example, the Bollinger Bands may widen before a false breakout, which can be a sign that a trap is being set. How to Trade Trading Traps Once you have identified a trap, you can trade it in one of two ways: Long trap: If you believe that the trend will continue, you can enter a long position on the re-test of the breakout level. Short trap: If you believe that the trend will reverse, you can enter a short position on the break of the breakout level. Examples of Trading Traps 3.1 Triangular Trap Unveiled: Discuss the bearish implications of descending triangles in technical analysis and their potential use as manipulation tools. Explore how market manipulators engineer these patterns to trigger artificial stop-losses. Case Study: NEAR's Triangular Intricacies: Analyze NEAR's descent within a descending triangle and its unexpected breakout. Offer insights into the motives behind orchestrating such traps and how traders can leverage these market dynamics. Here are some examples of how trading traps can be created and traded: Shakeout trap A shakeout trap is a false breakout that is designed to trick traders into taking a position in the wrong direction. For example, a cryptocurrency may be trading in a horizontal range for several months. The price then breaks below the lower range boundary, which is a sign of a potential bear trap. However, the price quickly reverses and re-tests the lower range boundary. This is a good opportunity to enter a long position, as it shows that the trend is still in place. Fakeout trap A fakeout trap is similar to a shakeout trap, but it occurs after a trend has already begun. For example, a cryptocurrency may be in a bull market. The price then breaks above a resistance level, which is a sign that the bull market is continuing. However, the price quickly reverses and re-tests the resistance level. This is a good opportunity to enter a short position, as it shows that the bull market may be coming to an end. Reversal trap A reversal trap is when the trend of a market changes direction. For example, a cryptocurrency may be in a bull market. The price then breaks below a support level, which is a sign that the bull market is ending. However, the price quickly reverses and re-tests the support level. This is a good opportunity to enter a long position, as it shows that the bull market may be resuming. The Art of Spotting Fakeouts: Define the concept of fakeouts and unveil their potential as precursors to bullish movements. Offer insights into distinguishing genuine breakouts from manipulative traps set by market actors. Case Study: ZIL's Quick Turnaround: Uncover the Zilliqa (ZIL) chart, examining the deceptive fakeout beneath a pivotal horizontal level. Emphasize the strategic importance of waiting for a retest post-fakeout as a confirmation signal. Conclusion Trading traps can be a dangerous but profitable part of cryptocurrency trading. By understanding how traps are created and how to identify them, you can increase your chances of trading them successfully. Additional Tips for Trading Trading Traps Use stop losses: Stop losses can help you limit your losses if you are wrong about a trade. Be patient: Do not rush into a trade just because you see a trap. Wait for the
Education
by Yaroslav_Krasko
2
"HODL" Mentality: Lessons for TradersThe HOMie Mentality: Buying at ATH Many novice traders, or HOMies, fall into the trap of buying a cryptocurrency when it's near its all-time high (ATH). They're influenced by FOMO (Fear of Missing Out) and jump into the market without a clear strategy. Market Dynamics: Understanding the Cycle Cryptocurrency markets follow a cyclical pattern of ups and downs. Novice traders often enter during the euphoric "FOMO" phase when prices are at their peak. The Emotional Rollercoaster: Avoiding HOMie Mistakes To avoid the HOMie trap, it's crucial to detach emotions from trading decisions. Create a clear strategy with entry and exit points, and stick to it. Risk Management: Protecting Your Investments Novice traders should prioritize risk management. Only invest what you can afford to lose, and avoid putting all your funds into a single asset. Education: The Key to Success Novice traders can transition from being HOMies to informed investors by educating themselves. Learn about technical analysis, market cycles, and different trading strategies. Conclusion: From HOMie to Trader The HODL mentality can be a valuable strategy when used wisely, but it shouldn't lead novice traders to make impulsive decisions. By understanding market dynamics, managing risk, and educating themselves, HOMies can transform into informed traders who navigate the crypto market with confidence. Remember, successful trading takes time and patience, and every trader, even the most experienced, started as a novice. 🌐📈💡 ❗See related ideas below❗ Don't forget to like, share, and leave your thoughts in the comments. 💚🚀💚
Education
by Yaroslav_Krasko
1
SPX. The Certainty Trap ‘Never’ &‘always’ have no place in MKTS!Just passing this cool info written by a guy called Ben Carlson. - Ben discusses the differences between probability and certainty: "There are two arguments I see on a regular basis that show up as a result of data overload: …because that’s never happened before. …because that’s what’s always happened before. -The problem with this line of thinking is that it can lead investors to fall into what I like to call the certainty trap. It’s this all-or-nothing line of thinking that causes so many to constantly attach extremes to every single market move or data point they see. The beginning of the recovery or the end of the world is always right around the corner. The assumption is that we’re always either at a top or a bottom when most of the time the markets are probably somewhere in the middle." -The reason the investing certainty trap is so easy to fall for is because historical data can feel so safe and reassuring. Look here, my data says that this has never (always) happened in the past. Surely this trend will continue. I’ll just sit here and wait for my profits to start rolling in. -‘Never’ and ‘always’ have no place in the markets because no one really knows what’s going to happen next. ‘Most of the time’ is a much more reasonable goal, because nothing works forever and always in the markets. If it did everyone would simply invest that way. I think a much more levelheaded approach is to follow the Jason Zweig 10 word investment philosophy: -Anything is possible, and the unexpected is inevitable. Proceed accordingly.
SP:SPXEducation
by samitrading
2
SMC TrapHello traders - In this part, we will talk about the smart money trap. - There are a lot of traps for traders left by big boys in the markets to take your money. That's why it's important to be careful, and don't swim with fish but swim with sharks if you don't want to be eaten. - The move is designed to first take out early sellers, then take SMC traders. -We'll explain this example in a few steps: 1) We see that the price is in a downtrend, reacting from OB, and supply has full control in this situation. 2) We can all assume that the price will continue to be bearish. 3) Now you can see that the price is coming aggressively to the last OB, and before that, we had WBOS, and there was a trap made for SMC traders. 4) This is inducement, and we talked about it in one of the previous posts, you can go back to it for a more detailed explanation. 5) This OB is not valid for us, because we have seen a lot of liquidity that the price needs to pick up and an aggressive retest. 6) We waited for the price to pick up all the SMC entries, and then the price came to our safe entry, which is marked on the chart as a valid OB. If you liked this example, leave a like for more content like this.
BITSTAMP:BTCUSDEducation
by hybridtradingfx
4
📌Bear and Bull Traps:what is it and how to avoid ?😵Capital markets like crypto, stocks and forex are full of traps designed to prey on unsuspecting and emotional retail traders. Two of the most common are bear traps and bull traps. Traders have many challenges when trading, these include high volatility, unexpected events, incorrect signals, risks, among other challenges like Bull Trap or Bear Trap. Before we tell you about the Bear Trap and the Bull Trap, we will tell you what traps are like in Trading. What is a trap? Every day, the market presents numerous traps that reach a large number of people and absorb the volume necessary to survive. The market constantly develops pricing structures that confuse the vast majority of participants. The trap occurs when the price appears to be about to break a key level , such as support/resistance lines, dynamic trend lines, or major moving averages, and then is pulled in the opposite direction. For example, it passes the support level in a downward movement and then goes back up. " as I mentioned the Traps can be bullish or bearish. In a market structure the ascendants are called Bulls, that is, Bulls Traps and the descenders are called Bears , Bears Traps." This type of trap can be caused by the behavior of the main market players(whales , exchanges, institutional investors, hedge funds ) in order to liquid retail traders by hitting their stop-lose or liquidation price to put them out of the game! Bull Trap : A bull trap is a situation where the price breaks through resistance, indicating a strong upward trend, but turns and falls. Exampels: 1: 2: 3: 4:https://www.tradingview.com/x/dDMmav8j/ To identify this type of bull trap, it is necessary to identify the following: The general trend is still bearish in the long-term and price suddenly goes up . There is a rally that looks like a trend reversal. The price goes back up, creating higher high of previous leg , which puts everyone out of the game as stop-loss was usually just above the recent movement . The price drop below the previous high again . Likewise, to avoid get in a bull trap , you must also: -Watch for resistance tests: in this case, if the price tests resistance several times in the strong uptrend, it could be an indication that a price reversal is coming. Define the sideways movement: If the price has started to move horizontally within the uptrend, the uptrend is likely to end soon. So, if the price crosses an upper line of the horizontal channel, you should stay away from the market to avoid a possible bull trap. Check candle size: the price forms a larger candle than the previous one in the last step of the trap. There is no 100% guarantee that it is a trap, but it is better to be careful and confirm with models or indicators. Bear Trap : You should be especially careful not to fall into a bear trap when you want to open a trading position when the price is breaking the support line. This is because when the price breaks the support line, some traders go short and then the price reverses and goes up. Now traders are left with open short positions, so they can exit trades or wait for the price to reach the stop loss level they previously set. Examples: 1: 2:https://www.tradingview.com/x/wI0UIPDC/ 3:https://www.tradingview.com/x/0rqsMkqQ/ To identify this type of bear trap , it is necessary to identify the following: The general trend is still bulish and price initially goes up. There is an upward to downward reversal that forms a top. People go short and place their stop loss just above this high. The price goes back up, above the previous high, triggering many stop losses. How can you avoid these pitfalls? Traders and investors can avoid traps by looking for confirmations following a breakout. For example, a trader may look for higher than average volume and bullish candlesticks following a breakout to confirm that price is likely to move higher. A breakout that generates low volume and indecisive candlesticks—such as a doji star—could be a sign of a Possible traps. The best way to handle bull traps is to recognize warning signs ahead of time, such as low volume breakouts, and exit the trade as quickly as possible if a trap is suspected. Stop-loss orders can be helpful in these circumstances, especially if the market is moving quickly, to avoid letting emotion drive decision-making. so : 1-Check the volume as first confirmation: Real price reversals require a significant amount of volume. If you see a sudden reversal without a large amount of volume behind it, it’s most likely a trap. 2-Look for different divergences confirmations: for example false breakouts preceded by significant negative RSI divergence.RSI or “relative strength indicator”, is a popular momentum indicator that charts the strength and weakness of an asset’s price. 3-Check the News: News, whether it’s good or bad, can have a significant emotional effect on inexperienced traders and lead to poor irrational trading decisions. Market makers know this and often use news to initiate bull or bear traps. If you see a sudden price movement with average volume, be sure to check the news before making any trading decisions. More often than not, movements like these are simply designed to catch emotional traders off guard, And more importantly, ask this question in which market is a news broadcast? For example, in the recent down market, Dogecoin was supported several times by Elon Musk, which continued its downward trend as a bull trap after the temporary price pump. 4-Risk Management rules: (proper position size and stop-loss ) Using stop-loss orders is a crucial part of any successful trading strategy. Even if you feel completely confident about a trade, the market can still completely go against you. It's important to set a strict loss allowance by closing a position if a trade goes the wrong way. it dosent matter where you place your stop lose by set aside maximum 1-2% loss of your starting capital can be a good starting point. 5-Choosing the right market and instrument Also, as a last point, it is very important in which market we trade and which pair we choose For example, if you trade in the cryptocurrency market, you should know that this market is much more subject to manipulation by whales and big players due to the inherent risk such as the low market cap and the very low trading volume compared to other markets. They can manipulate the market price and the price of a crypto token, so if we trade in these market, it is important to pay attention to choose a the appropriate pair by good trading volume and marketcap . Final thoughts: It can be wise to always use risk management rules and stop loss order to build potential losses into your trading strategy and minimize emotional turmoil. Don’t expect the market to recover in your favor because many times, it simply won’t. Bear and bull traps are one of the most common trading pitfalls when trading in any market especially cryptocurrency market . Thankfully, it’s easy to minimize losses by identifying these traps or if you have the right cryptocurrency trading strategy and mindset.
GEMINI:BTCUSDEducation
by PRO_SMART_Trader
BTC - How sharks lure fish🐟Now, through the efforts of a market maker, something similar to the Head and Shoulders can be traced on the chart. This is drawn in order to lure inexperienced traders who will be trapped into shorts. However, experienced traders know that a H&S is a reverse setup! Knowing how to spot traps of the market maker is just as important as knowing how to find your formations. This skill will help you better predict future market movements and trade in the direction of wind. What do you think of this idea? What is your opinion? Share it in the comments📄🖌 If you like the idea, please give it a like. This is the best "Thank you!" for the author 😊 P.S. Always do your own analysis before a trade. Put a stop loss. Fix profit in parts. Withdraw profits in fiat and reward yourself and your loved ones
Education
by Artem_Dishel
4
📚 Inducement: What Is It ⁉️Inducement is a trap before an area of supply or demand. Price will usually lure impatient buyers/sellers into the market before the zone is met to create liquidity. Once the impatient traders get trap [ped and stopped out, the true move begins. This just goes to show the importance of sitting on your hands! Traders, if you have your own opinion about this idea, write in the comments section, I always reply. 💬 🚨 RISK DISCLAIMER: Trading Crypto, Futures, Forex, CFDs, and Stocks involves a risk of loss. Please consider carefully if such trading is appropriate for you. Past performance is not indicative of future results. Always limit your leverage and use a tight stop loss. -------------------------------------------------------------------------------------------------------- Please like, subscribe, and share this idea with others! ⬇️ --------------------------------------------------------------------------------------------------------
Education
by AlkalineFX
31
MARKET MAKER MANIPULATIONHello everyone! Today I want to discuss with you a very interesting topic - the traps of market makers. Let's get started. Traps… How often did you encounter this - you opened a position, and why did the price go sharply against you, knocking out your stop loss, and as soon as your position was closed with a loss, the price turned around again and went where you expected? You analyzed your trades and did not understand what you did wrong. Actually, it's not your fault. You just fell into the trap of a market maker. These traps are created by large players in order to collect the stops of small market participants, thereby creating liquidity for opening or closing their large positions. What do traps look like? As a rule, traps are false level breakouts. It is in these places that small players place their stop orders and this will be the main goal of a large player. The first trap pattern is the classic Double Top pattern. Everyone knows from books that the second peak should be slightly lower than the first. So the market tells us that the price no longer has the strength to make new highs and it's time to fall. In fact, above the first peak, most traders place their stop losses, and large players push the price to them in order to activate orders and gain liquidity, after which the market reverses. The second trap situation is the trend. The trend is our friend! Everyone remembers and knows this. In addition, everyone remembers that the trend changes when the price, in a bear market, renews the previous high. After the new high, we believe that the trend has changed, but the price suddenly falls even lower and the downtrend resumes again, what happened? The big player knows that traders put their stop losses above the last high and that is why the price pushes higher, so liquidity gathers, after which the bear market continues. How to trade? We cannot find out the thoughts and desires of major players. The average trader should analyze the chart and try to act in the direction the market maker is pushing the price. Pay attention to false breakouts - these are strong signals. Seeing that the price has updated the maximum, and then turned around sharply, go short, so you will trade in the same direction with a major player. Also, remember that traps are usually characterized by candles with long tails. A long shadow will be a false breakout. Conclusions Trading traps is very difficult and at the beginning of the path you will fail. Study the market, try to understand how a big player thinks. When you learn, this strategy will bring you big profits. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
16
Understanding Equal High LiquidityThe concept around equal high liquidity comes from the understanding that stop losses hold above these points. In this example, price broke out of bullish structure and began to form bearish market conditions. This would of course attract sellers, especially at the double top point marked. The idea is simple, tackle the impulsive sellers before the trend continues. You can see that price began to lure sellers in from the double top but then came back to take them out before continuing with the true move. This type of move falls under all concepts of money distribution within liquidity and is definitely worth adding to your strategy.
Education
by AlkalineFX
⚡️ Understanding Breakout Traps ⚡️If we see a pattern form that retail likes to trade, It is highly likely that this pattern may get manipulated. The reason these common patterns get manipulated is because of liquidity forming. Banks want to make sure they can create enough liquidity for themselves to get positioned nicely in the market. They do this by driving the price up/down into stop loss areas. To avoid being caught out we need to sit on our hands, wait for the stop loss hunt to occur before we go-ahead with our initial position bias.
Education
by AlkalineFX
gold dxy5.12.20 This video is the sequel to the previous video. In addition, I showed two ways to frame range boxes on the gold contract. I decided to give a closer look at the bear trap on the DXY and as I did this, I realized I had to look at a couple of time frames in order to add clarity. This was a bear trap on smaller time frame, but it is a retest of a breakout higher. It is what it is on different time frames, but it has value to do this in my opinion. As I was listening to the video before uploading, I took note of how bullish the whole pattern looks on the DXY on the daily chart... to the point that it looks likely that the price will move higher to an ABCD pattern... even though I am not a breakout buyer, and the market is still in arrange box which is the dominant behavior. If you don't understand this, I will come back and review it once we get a chance to see how the dollar plays out. The reason I bring this up is because of my conviction that higher time frames result in much more accurate assessment of the bullish or bearish nature of price action.
TVC:DXYEducation
by ScottBogatin