Thread-5 | Traps Pattern
In this thread we will discuss:
1. Traps
2. Importance of Traps
3. Types of Traps patterns
4. Bear Traps
5. Bull Trap
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In this thread we will discuss:
1. Traps
2. Importance of Traps
3. Types of Traps patterns
4. Bear Traps
5. Bull Trap
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Traps is getting stuck in a trade that has moved against the entry
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When a sell pattern (Double Bottom Sell) occurs immediately after a buy pattern (Double Top Buy), it is a Bull Trap formation.
Similarly, if the Double Top Buy signal is triggered immediately after the Double Bottom Sell signal it is a Bear Trap Formation
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Similarly, if the Double Top Buy signal is triggered immediately after the Double Bottom Sell signal it is a Bear Trap Formation
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Trap in the direction of the trend is a logical setup.
For the trend filter, we will use 20 Column Moving Average (MA)
I have written a detailed thread on MAs. If you want to read it
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For the trend filter, we will use 20 Column Moving Average (MA)
I have written a detailed thread on MAs. If you want to read it
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If the price is trading above 20 column MA, Trend = Bullish
If the price is trading below 20 column MA, Trend = Bearish
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If the price is trading below 20 column MA, Trend = Bearish
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Trading traps in the direction of Trend.
Trend = Bullish, trade Bear Trap
Trend = Bearish, trade Bull Trap
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Trend = Bullish, trade Bear Trap
Trend = Bearish, trade Bull Trap
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Examples of Bear Trap on 1% Daily TF Charts
AARTIIND
ABB
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AARTIIND
ABB
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Examples of Bear Trap on 0.5% Daily TF Charts
BRITANNIA
INFY
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BRITANNIA
INFY
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Examples of Bull Trap on 1% Daily TF Charts
YESBANK
ZOMATO
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YESBANK
ZOMATO
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Examples of Bull Trap on 0.5% Daily TF Charts
RBLBANK
ABGSHIP
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RBLBANK
ABGSHIP
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Traps work on the Options Chart as well. Let us observe the Option Charts from the seller's perspective.
So, we are looking at Bull Trap below 20 Column SMA on 1% and 1-min Options chart
Let us see some examples on the NIFTY & NIFTY BANK Options chart
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So, we are looking at Bull Trap below 20 Column SMA on 1% and 1-min Options chart
Let us see some examples on the NIFTY & NIFTY BANK Options chart
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If the price reverses immediately after Bear Trap and generates DBS, then the pattern fails
If the price reverses immediately after Bull Trap and generates DTB, then the pattern fails
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If the price reverses immediately after Bull Trap and generates DTB, then the pattern fails
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Summary
1. Traps work best in the direction of Trend
2. 20-Column SMA should be used as a trend filter
3. Price above SMA = Bear Trap
4. Price below SMA = Bull Trap
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1. Traps work best in the direction of Trend
2. 20-Column SMA should be used as a trend filter
3. Price above SMA = Bear Trap
4. Price below SMA = Bull Trap
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Till then stay connected
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Till then stay connected
Telegram: t.me
YouTube: youtube.com
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