X.22. Identification of traps for fooling the “crowd”. Shaking out weak players. Collecting stops.

So, let’s take a look at the arsenal of traps used on any exchange. By the way, let’s say that such traps are the bread of stockbrokers, because they provoke a huge number of transactions caused by the exposed stops of traders.

– repeated movement up and down without much progress in the price movement during the day. A very dangerous trap on which you can squander a huge amount of money. It is found on Sberbank shares. When the price is pulled up by +3-6%, then down by -3-6%, and by the close of the session, the price returns to the opening price. It is based on the fact that a wide spread is created so that traders believe in the truth of the movement (imitation of a shock day) and immediately hopes are destroyed by moving the price in the opposite direction. Use a trailing stop or move the stop manually for the rising/falling price.

– squiz or cutting straits/prostrations prices. A very rapid price change with a wide spread is characteristic. Once in such a situation, the trader “turns to stone” and begins to recover only when the trap has fully worked. To avoid falling into this type of trap, use the feet.

– the approach of the price to the level and a very fast rebound in the opposite direction. The price seems to grab your bid, put up for a long time and immediately rushes down, not giving an opportunity to react. It is very difficult to react, so put a stop in advance and move after the price until you approach the level.

– false breakouts. A wide spread is made in the direction opposite to the future movement. False breakouts are usually found after a long trade, so their appearance is predictable. Wait for the confirmation bar and only then enter into the transaction. You can also place an order higher/lower in the direction of the expected price movement. – imitation of a trend reversal, with a further continuation of the trend. The price falls strongly for a long time, then a wide bar is made up, another one and then the price continues to fall with the formation of new lows. Familiar? Follow the trend.

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