October: a new month and a fresh mindset.

I haven’t posted in a few days. I have been trading, but I wasn’t satisfied with my method or strategy. I noticed that only a small percentage of the time I was able to follow the price, but most of the time, I was confused by it.

Whenever I watched a video or lesson, it seemed that my lines didn’t match, or I was too busy getting confused over a 2EL instead of a 2ES.

So, I took some time away from the live markets and began to practice something that I have personally seen happening a lot: traps!

The trapped becomes the trapper

Let’s examine my first trade. As you can see, a range has formed, followed by a large bullish candle that breaks forcefully out of the range. After that, the sizes of the bullish candles begin to decrease.

Two bearish candles are shown on the chart. The first candle suggests a pullback, and the second candle is notably large in size.

Now, the old me, and I am sure many others, would have seen this as an opportunity to go short back into the range, expecting a failed breakout. It looks like a great opportunity, but it’s a TRAP.

What I now wait to see is a tick below the previous bullish candle, ensuring that new sellers have entered the pullback. Once I see this, I enter long and target the high of the first bullish candle. Why? Because this is where stops will be placed. How do I know? Because I used to be this trader!

As this is completely new to me and is a strategy I have developed on my own, I haven’t yet determined the best take profit amount. For now, I am targeting what seems to be an easy +4 ticks.

Look at the image below, which shows my trade. But now, nearby in the ORANGE boxes, there are more of these traps. Every time the price triggers below an area that looks attractive to SHORT, it immediately traps and stops the bears. This is an opportunity I want to be part of.

An unconventional method with difficult entries

I’ve heard people talk about traps before, but I haven’t seen anyone trade them. Everything I am doing here goes against my fundamentals, and it’s difficult to find the correct entries when going against the grain.

In this trade, I entered too early initially. Notice how I entered after the initial bearish candle. However, the price had not yet moved before that bearish candle, meaning there was no one to trap at this point.

Regardless, I was so confident that I set a DEEP (not recommended) stop loss. The price then gave me a clear sign of a trap, and I re-entered the market in the same area, securing a healthy +12 ticks from this position.

Notice in the next picture, a trade I missed because I wasn’t watching the chart. Once again, it shows an attractive area to sell but ends up getting trapped.

They Keep Getting Trapped!

I had actually published this post and was about to stop trading for the day when I just couldn’t resist.

Look at this image. It is almost identical to the first trade. Price breaks strongly above a resistance zone, the bears step in, and price begins to reverse. Only for the late bears to get trapped as price moves aggressively back to hunt for their stops.

As I am still learning this new system, as I mentioned, I’m not quite sure about my TP. On this trade, I initially targeted 1 tick above the previous high for the stop hunt, but my conscience took over and allowed for a simple +4 ticks.

The Perfect Entry Doesn’t Exist

I haven’t perfected entries and stop losses yet, but I am simulating this and working to improve the method.

This method, as I said, isn’t something taught to me. It is simply one that I noticed keeps happening in the market.

I haven’t yet perfected entries and stop losses – but I am simming this and trying to perfect the method.

For October, unless something drastic occurs, I’ll be using this to track how the month progresses.