Your observation is wrong .. Area 4 is not a trapped trade
why? Because
it didn't thrust the previous swing high..
There are no trapped longs in area 4, Why? Because it didn't thrust the previous swing high.. If it has not touched previous swing high then there are no traders who took long positions in the anticipation of a break..
And candle stick pattern has nothing to do with price action...
It is just a matter of personal belief.There is no hard and fast rules in trading.
Trading beliefs need not be unanimous/synonymous.
For me that is a trap.
Any price movement that takes the trader to surprise is a trap.
And resistance is not just a line.
And Trap need not happen always only after breaking previous highs and reverse.
I don't believe in taking profits in the area which you marked.
I wont wait markets to reverse 68 points and book profits.
You may not believe in MA/BBands/Candlestick patterns and I find them useful as well.
You may believe only in price swings and taking trades in the direction of higher time frames while I may take both long and short trend counter trend trades as well with other set of rules.
Trends exists in all time frames and a trader may /may not take trades only in the direction of high time frame trend.
Or just stick on to the time frame which one trade.
Exits vary/definition of trends vary.
The reasons (rules) for entry/exits vary from traders to trader / personality/trading style/trading time frame and that's why buying and selling keeps happening isn't it ?