Traders, if this is helpful give a thumbs up and sub for more thanks.
This bull trap and then pullback to stop runs (stop loss hunting) setup have resulted in very good trading opportunities before:
The psychology behind these moves are basically that traders see a breakout and enter trades but then price makes a pullback/retracement to take out stops and then reverse and continue in the original breakout direction.
You can always ask yourself – where are traders in pain? This can help a lot finding good trades.
Instead of buying the breakout (buying high) these stop loss hunting entries will give you a much better entry point.
The risk reward ratio on these trades are very good.
Let me know in the comment section below if you have any questions.
This makes a lot of sense, thanks for the eye opener
tradingwalk
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Happy to help
mbongeninkala56
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The best analysis ,i did not see that one
tradingwalk
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Thank you
motleifaul
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We are testing the 2016 July high now. This Fibonacci retracement seems to be completed and we may continue the long term rise. Good analysis!
semonewithane
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I'm late to the party but this analysis was spot on. I've never asked myself that question and now that I have, it does make a lot of sense. Will be looking for similar setups as well.
GSpecInvest
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Absolutely Indeed ... this strategy will make you rich and consistent ... with good self-control and patience
Wealthykim
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good point will keep that in mind
ThaDocta
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it's possible but also the current conditions may put downward pressure on all assets for the most part. I'm watching for now thanks.