It seems that most of the examples of market traps which I've shared over the years, were all traps which trigger very quickly.

We all like the quick ones. They're easy. Like this one:

Traps - They don't always play out straight away!

See here for the TST, BOF & BPB Setups.

Let's see what happens as price breaks the swing high at C:

Traps - They don't always play out straight away!

And the outcome:

Traps - They don't always play out straight away!

Interestingly, had I not been trading this trap opportunity, would I perhaps have seen the even better one that followed immediately after?

Traps - They don't always play out straight away!

We all love the traps that trigger quickly and move immediately in the positive direction. 

But traps don't always spring quickly.

Sometimes they require a little patience.

Sometimes they play out slowly.

Like this one which occurred a bit later:

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

Traps - They don't always play out straight away!

When a trap doesn't trigger straight away, be patient.

Price action can still provide the shock necessary to trap the other market participants.

Remain alert.

And as always… keeping assessing the price movement from the perspective of "the other trader" and their fears, their hopes and their dreams.

Know your enemy! Strike when they're weakest.

Happy trading,

Lance Beggs

 


 

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5 Comments

  1. Hi Lance,
    in the third chart on this page, you mentioned “slippage”. I didnt understand it in the context of the chart. Please explain.

    Regards
    Mahesh.

    1. Hi Mahesh,

      There are times and places when you shouldn’t be surprised if you get a tick or two slippage (assuming entry via a market order, or stop market order). One of these is in very fast momentum conditions. Another is on break of a very obvious and well defended level. Another (as shown in this chart) is when entering right at the point at which a trap is sprung. Slippage may be on the full position. Or just partial position. I never like it. But it’s just part of the game. The only option to avoid it is to use a limit order (or STOP LIMIT). But that incurs the risk of no fill at all, or just a partial fill. So if we’re entering at a location or time that has potential to offer slippage, we need to decide which of the two options we prefer. Or which we most wish to avoid.

      Cheers,
      Lance

  2. Hi Lance,

    Hope you’re healthy and well. In the 9th image from the top, wherein you have written No for all the candles where you avoided going long and chose to wait instead, the second last candle is a bullish one but you have still said no. With the benefit of hindsight it’s easy to see why but why according to you was this not enough to instil fear in shorts who were already in the trade? I understand that even though this candle was a bullish one it didn’t do much when compared to the previous candle and when taken in context of the entire downward move. However, it does seem like it would have trapped a few shorts and would have got the shorts a little anxious. So doesn’t it require us to at least take notice and be alert for the next few candles or am i missing something here?

    Would appreciate a response to my rather long question. Have a great day ahead!

    1. Vinayak,

      Thanks for your question. That candle is green. But it’s not really something that can be considered bullish. It only managed to push back to the midpoint of the prior candle.

      Using the definition in the “Better than Candlestick” article series, it’s a high-close-range candle. And in the context of that extended grinding pullback, it’s not bullish enough to worry anyone short. (Article series starts here – https://yourtradingcoach.com/trading-process-and-strategy/better-than-candlestick-patterns-part-one/)

      Compare the difference between this candle and the one discussed in image 11. That is bullish. And that would definitely have shorts worried.

      Green is not enough. Consider context.

      Cheers,
      Lance

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