Once again, we have Mark Chapman’s Trapped Traders video analysis. He is going to review USDJPY and share with our audience the “trading traps.”
The traps we’re going to look at today at what I call a trap break pullback and these traps occur when traders at the hard right edge believe that a level of support and resistance is actually holding and they’ll start trying to trade off it, believing that it will follow through. The critical part on this setup is that it indeed does start to sell off initially, and I refer to this as the confirming price action that draws traders in or entry cheese.
As soon as the trader commits capital because they had been very seduced and induced in by this strong move down and it pulls back, they enter, their money is now at risk. So, as price breaks through that level, I’m suggesting that humans aren’t very good with discipline and there’s some people in here holding on to their losers and being squeezed.
So, as price pulls back, this looks like a pretty good place to get long.
Source: Forex Traders Daily
José Ricaurte Jaén is a professional trader and Guest Editor / community manager for tradersdna and its forum. With a Project Management Certification from FSU – Panama, José develops regularly in-house automated strategies for active traders and “know how” practices to maximize algo-trading opportunities. José’s background experience is in trading and investing, international management, marketing / communications, web, publishing and content working in initiatives with financial companies and non-profit organizations.
He has been working as senior Sales Trader of Guardian Trust FX, where he creates and manages multiple trading strategies for private and institutional investors. He worked also with FXStreet, FXDD Malta, ILQ, Saxo Bank, Markets.com and AVA FX as money manager and introducing broker.
Recently José Ricaurte has been creating, and co-managing a new trading academy in #LATAM.
During 2008 and 2012, he managed web / online marketing global plan of action for broker dealers in Panama. He created unique content and trading ideas for regional newspaper like Capital Financiero (Panamá), La República (Costa Rica), Sala de Inversión América (Latinoamérica) and co-developed financial TV segments with Capital TV.
He is a guest lecturer at Universidad Latina and Universidad Interamericana de Panamá an active speaker in conferences and other educational events and workshops in the region. José Ricaurte worked and collaborated with people such as Dustin Pass, Tom Flora, Orion Trust Services (Belize) and Principia Financial Group.