THE HOOK TRADE ... OUTPLAYING A BULL TRAP
This is my favorite trade. It is simple, logic, sure and damn effective.
For this trade you have to identify 2 things.
A trend and a price equilibrium.
In this example we have three clear bullish impulse and 2 corrections.
After the top at 10480 there was a decreasing selling pressure over the following three candles (smaller candle bodies). The firth candle was positive and with same size as the third suggesting the formation of a price equilibrium over 4 days and a possible new higher low. The fifth candle confirmed that the trend was resumed and the buying pressure overcame the selling pressure.
As the price action resumed the trend and equilibrium was broken on the upper side, a break of the price under the equilibrium is a strongest predictor of trend inversion and short a position can be safely opened. Target is a full retracement equivalent to the price retracement from the top to the equilibrium.
Top to equilibrium = equilibrium to target
BIO
For this trade you have to identify 2 things.
A trend and a price equilibrium.
In this example we have three clear bullish impulse and 2 corrections.
After the top at 10480 there was a decreasing selling pressure over the following three candles (smaller candle bodies). The firth candle was positive and with same size as the third suggesting the formation of a price equilibrium over 4 days and a possible new higher low. The fifth candle confirmed that the trend was resumed and the buying pressure overcame the selling pressure.
As the price action resumed the trend and equilibrium was broken on the upper side, a break of the price under the equilibrium is a strongest predictor of trend inversion and short a position can be safely opened. Target is a full retracement equivalent to the price retracement from the top to the equilibrium.
Top to equilibrium = equilibrium to target
BIO
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