Price Action Doubt

#1
In general as per price action trading strategy, we know that we can enter in opposite direction with trapped traders. But in today's Nifty Future, I didn't observed this kind of strong move opposite to trapped traders. Please refer the attached screen shot and help me to understand this scenario as I am in learning process of price action.

Thanks,
Mullangi
 

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jagankris

Well-Known Member
#2
In general as per price action trading strategy, we know that we can enter in opposite direction with trapped traders. But in today's Nifty Future, I didn't observed this kind of strong move opposite to trapped traders. Please refer the attached screen shot and help me to understand this scenario as I am in learning process of price action.

Thanks,
Mullangi
Trend change happened much before.
In the marked area 1 - you say trapped traders ?
And Area 4 - you didn't mark - trapped traders ? :D why because you wanted the markets to go up ? ;)
Market conditions need not be same daily.
Read more charts and then decide.
 

umeshmandal

Well-Known Member
#3
At point 4 Longs were trapped as market stance was to go up and then it made a doji, almost a gravestone doji signifying that most gains are lost clearly telling that market has made up its mind to move to Chennai , I mean South ! :)
 

jagankris

Well-Known Member
#4
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 ? :)
 
#5
Trend change happened much before.
In the marked area 1 - you say trapped traders ?
And Area 4 - you didn't mark - trapped traders ? :D why because you wanted the markets to go up ? ;)
Market conditions need not be same daily.
Read more charts and then decide.
Dear JK,

I uderstand that the trend is in uptrend and point 1 is first pullback of recent high in the uptrend.
Regarding 4, how can we say it is trapped trader as it didn't attempt to breach recent high( please refer Supriya's response on this point).

Please clarify me
 

jagankris

Well-Known Member
#7
Dear JK,

I uderstand that the trend is in uptrend and point 1 is first pullback of recent high in the uptrend.
Regarding 4, how can we say it is trapped trader as it didn't attempt to breach recent high( please refer Supriya's response on this point).

Please clarify me



See where the trend change happened.Where the first pullback happened with in the first trend line drawn.

Now - Trapped Traders
Trapped traders doesn't mean - always it should happen at support/resistance.Or prior swing breakout failure alone should be called as trap - is not reading price action :D.

It can happen any where - as I said any unexpected price reversal is a trap for me.

Pay attention to the candle stick pattern like Doji,Hammer,Inverted Hammer,Engulfing,Tweezer Tops as well.
And also multiple candle price pivot patterns along with the price swings.

A hammer at top is a strongly bearish and an inverted hammer at the bottom is bullish ;)

Intraday Gaps are beautiful traps.(Not the opening gaps).
See the 31/08/2015 - 1.33 PM candle (1Minute) - beautiful trap.Sudden price shock.

Hope this helps.
 

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