STRAT 11 : Basic premise
As price continues in a trend, more and more traders keep piling into the same direction, hoping that the trend will continue and they will make money. However, at some point, the trend sharply reverses, breaking the market structure in opposite direction and trapping a whole bunch of retail traders in the direction of trend which just...
You can see today's rally in bank nifty . Generally what happens if there is a big rally then after achieving the top the index will retrace 20-30 to a maximum of 50 percent. Hence whenever you see green candles at 30 or 50 % levels of fibo retracement you can still go long in direction of the rally. This is the move where many retailers get trapped after selling...
Once you spot a location to trade from (be it a liquidity hunt, or a false breakout + market structure break) - that's only half of the job. The next most important step is to draw a correct zone which gives you a safe and reliable way to enter and define your risk.
I've always found that drawing zones which help you define your entry & risk is an art, more so...
