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  • #3,581
  • Sep 27, 2012 2:08pm Sep 27, 2012 2:08pm
Quoting adam777
For eurusd-15min by the look of your charts you entered on the 3rd bar that penetrated S/R. Were you waiting for price to enter the supply zone on the smaller 15min TF marked by the black box, and this zone was actually the trigger for the trap?
I wasn't in front of my screen for the FTB touch trade otherwise I would have taken it, but I did see the bull trap so I took that and yes that is what I was looking at - price hit supply after a brief break of an extremely clear SR before moving back below - causing the bull trap.
  • #3,582
  • Sep 27, 2012 2:50pm Sep 27, 2012 2:50pm
Quoting extremerrage
well lj and his disciples correct me if i am wrong plz, this is an example of Eur,usd bear trap daily R is broken which i marked IN RED , so the herd thought it will continue to decline further without noticing where the real money is .. now we have clear fresh demand zone on weekly tf and where professional money is waiting .AND FTB.. SO is that correct ?
The theory is correct, but the example isn't a great one IMO.

A swing low is of course a logical place to be looking for bull / bear traps and of course the more obvious or major the swing high or low the better.

The problem with this example is the length of time price takes to break back above that swing low. IMO it takes too long to be really trapping many traders on the wrong side of the market.

Bull and bear traps occur quickly - it is the element of surprise that catches the novice traders out.

If you look at the EU and USDSEK examples you can see the traps formed on the same bar i.e. price breaking the SR and in each case reversing on the same bar.
  • #3,583
  • Sep 27, 2012 4:16pm Sep 27, 2012 4:16pm
Quoting lovejoy80
The theory is correct, but the example isn't a great one IMO.

Bull and bear traps occur quickly - it is the element of surprise that catches the novice traders out.
Here's one of mine from today. Note the speed at which price left to go short only to go long soon after.

Trade has red arrow. Didn't maximise profits due to bad management.
Attached Image (click to enlarge)
Click to Enlarge Name: 423 eurusd m15.jpg Size: 90 KB
  • #3,584
  • Edited Sep 28, 2012 12:28am Sep 27, 2012 11:44pm | Edited Sep 28, 2012 12:28am
Price touched S/R and retraced, but is this enclosed area the supply zone as well?

It looks like a supply zone on the 1hr, but I'm only learning ...
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EU-5MIN.JPG Size: 57 KB
Click to Enlarge Name: eu-1hr.JPG Size: 54 KB
WARNING: Don't follow me as I'm just learning
  • #3,585
  • Sep 28, 2012 12:42am Sep 28, 2012 12:42am
... or should the supply zone be left higher where price keeps moving into? or is it just a higher supply zone ...
Attached Image (click to enlarge)
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WARNING: Don't follow me as I'm just learning
  • #3,586
  • Sep 28, 2012 1:55am Sep 28, 2012 1:55am
That was a H1 supply zone - a RBD.

There was also an SR defining the lower edge of the zone so that was a valid area to be looking for a potential short.

Check out how price reacted to these two lower 'areas' too...
Attached Image (click to enlarge)
Click to Enlarge Name: EU M15.png Size: 37 KB
  • #3,587
  • Sep 28, 2012 4:16am Sep 28, 2012 4:16am
UJ long based on bear trap and CP.
Attached Image (click to enlarge)
Click to Enlarge Name: UJ 30M.jpg Size: 238 KB
  • #3,588
  • Sep 28, 2012 9:15am Sep 28, 2012 9:15am
No trading for me today, just an overnight NJ short.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: NJ H1 1.png Size: 28 KB
Click to Enlarge Name: NJ short.png Size: 24 KB
  • #3,589
  • Sep 29, 2012 5:34am Sep 29, 2012 5:34am
Quoting Balhana
UJ long based on bear trap and CP.
Hi Sang. I'm curious, why buy at the area marked and not after the immediate retrace back into the descending channel? What did you mean by 'whipshaw' (If I remember correctly?)

Thanks in advance. Have a good weekend all.
  • #3,590
  • Edited Sep 30, 2012 5:34am Sep 29, 2012 7:46am | Edited Sep 30, 2012 5:34am
Quoting 5.25
Hi Sang. I'm curious, why buy at the area marked and not after the immediate retrace back into the descending channel? What did you mean by 'whipshaw' (If I remember correctly?)

Thanks in advance. Have a good weekend all.
Take a look at the attached chart, which is my AU short trade that I mentioned. You also can see where I went short in the chart I showed you yesterday.

Whipsaw Engulfing Pattern.

1. Cluster (where supply and demand are balanced) near supply.
2. Cluster resolves north and becomes demand. Many novice breakout traders go long without knowing that they are going right into supply.
3. Cluster is engulfed south by big sellers in supply. Ignored cluster now becomes supply.
4. Need to go short when/if price retraces to cluster. You may find DBD in Sell Zone in lower timeframe to refine your short entry.


Regarding my UJ trade, I spotted the bear trap setup a little bit late. So I decided to go long after WE (whipsaw engulfing).

EDIT: This WE pattern is one of my favorite entry pattern both in LTF and VLTF (when S/D does not look strong enough for TT).
Attached Image (click to enlarge)
Click to Enlarge Name: AU 1H 00.jpg Size: 311 KB
  • #3,591
  • Edited 11:33am Sep 29, 2012 8:54am | Edited 11:33am
Quoting Balhana

Whipsaw Engulfing Pattern.

1. Cluster (where supply and demand is balanced) near supply.
2. Cluster resolves north and becomes demand. Many novice breakout traders go long without knowing that they are going right into supply.
3. Cluster is engulfed south by big sellers in supply. Ignored cluster now becomes supply.
4. Need to go short when/if price retraces to cluster. You may find DBD in Sell Zone in lower timeframe to refine your short entry.

One more example of Bearish Whipsaw Engulfing (BEWE). Look at GBP/JPY 4H chart.

EDIT: Bearish/Bullish engulfing momentum should be strong in this pattern.
Attached Image (click to enlarge)
Click to Enlarge Name: GJ 4H WE.jpg Size: 274 KB
  • #3,592
  • Sep 29, 2012 10:21am Sep 29, 2012 10:21am
Missed a very good setup on EA. Take a look at the chart.
Attached Image (click to enlarge)
Click to Enlarge Name: EA 4H.jpg Size: 201 KB
  • #3,593
  • Sep 29, 2012 4:47pm Sep 29, 2012 4:47pm
Quoting Balhana
One more example of Bearish Whipsaw Engulfing (BEWE). Look at GBP/JPY 4H chart.

EDIT: Bearish/Bullish engulfing momentum should be strong in this pattern.
The charts say it all, pretty self explanatory.

Thanks!
  • #3,594
  • Sep 29, 2012 5:01pm Sep 29, 2012 5:01pm
Quoting Balhana
Missed a very good setup on EA. Take a look at the chart.
Hmmm, slightly different to my charts. Curious why the trend lines don't line up. Either way, I had this setup lined up too but failed to instigate it.
Attached Image (click to enlarge)
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  • #3,595
  • Sep 30, 2012 5:15am Sep 30, 2012 5:15am
EU is approaching to the very interesting level (1.2785-2805).
Attached Image (click to enlarge)
Click to Enlarge Name: EU Daily.jpg Size: 203 KB
Attached Image
  • #3,596
  • Sep 30, 2012 5:48am Sep 30, 2012 5:48am
No higher high, so it's not standard QM, but I think it could be a tradable setup with a reversal PA in lower timeframes.
Attached Image (click to enlarge)
Click to Enlarge Name: AU 4H QM.jpg Size: 215 KB
  • #3,597
  • Sep 30, 2012 6:04am Sep 30, 2012 6:04am
Quoting Balhana
One more example of Bearish Whipsaw Engulfing (BEWE). Look at GBP/JPY 4H chart.

EDIT: Bearish/Bullish engulfing momentum should be strong in this pattern.
We also need a clean bull bar that breaks the cluster north, if price compresses out of the cluster and then engulfed by a clean bear bar then the setup is less strong imho.
Pipcrawler
  • #3,598
  • Sep 30, 2012 6:06am Sep 30, 2012 6:06am
Quoting 5.25
Hi Sang. I'm curious, why buy at the area marked and not after the immediate retrace back into the descending channel? What did you mean by 'whipshaw' (If I remember correctly?)

Thanks in advance. Have a good weekend all.
Thanx Tomek for asking that question, i just wanted to ask the same question about that
Pipcrawler
  • #3,599
  • Sep 30, 2012 6:22am Sep 30, 2012 6:22am
Quoting xmzhang
We also need a clean bull bar that breaks the cluster north, if price compresses out of the cluster and then engulfed by a clean bear bar then the setup is less strong imho.
Very good observation!! Yes, I agree. A strong breakout of the cluster can draw more novice breakout traders into the long position.
  • #3,600
  • Sep 30, 2012 8:02am Sep 30, 2012 8:02am
Quoting Balhana
No higher high, so it's not standard QM, but I think it could be a tradable setup with a reversal PA in lower timeframes.
balhana what is a QM if u dont mind ?
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