Wanted to briefly cover instances when I see traders get trapped within different variations as price consolidates and breaks down and how to potentially avoid.
We know the standard SFP-
Price sweeps a level and reverts to the opposing side.
What If we fail to sweep but close below an SFP?
This is when breakout traders come in and are trapped hence the manipulation cycle.
Notes on the Diagram Chart:
Potential Entries:
PO3's play a vital role when price breaks a key swing point. As long as we leave an opposing high any close below is a high probability we trap first and then go for the high second
Breakers offer good entry points for a broken low once we shift above
Conclusion:
Acting out of impulse anticipating certain movements will only leave you tied into a position that you didn't have a gameplan for.
Ask yourself why we are breaking down, if we left any opposing ends that might potentially trap retail traders.
Use logic.
End..//
• • •
Missing some Tweet in this thread? You can try to
force a refresh
This is how Alts have played out the last few weeks to my perspective and currently.
1. Initial drive up (get people bullish) 2. Sell off into HTF Demand (Sentiment flips bearish) 3. Price gets back above with trapped funds in lock.
Examples attached.
2/4
When you see price move up early in the week and sentiment favoring a certain side its good to zoom out and mark out your untested HTF Demands as we might be engineering liquidity.
Postions build up, market participants chopped within a short term accumulation.
Notes on the chart:
2. Distribution into breakout traders
Breakout traders expecting another leg up are lured into filling the remaining shorts Market Makers might have. Market participants provide liquidity to the market.
Wanted to go over a key topic I find important and that’s knowing when to cut your loses early on a systematic approach
Hard stops are in place to limit your loses and resolute around key levels
1.Long Example
2.Short Example
3.Conclusion
1. Long Example
When looking for longs it’s crucial to find formed demand levels/breakers above your key levels. Stop loss placements are around previous formed swing points.
Closes below key levels are signs of weakness and make for a manual exit.
Notes on the chart
3. Short Example
For shorts you want your key levels above your formed supply/resistance levels. Stop loss placements above previous swing points.