I'm about to reveal exactly how smart
money are building their positions and
hunt for liquidity by the end of the
video you'll learn how to avoid being a
victim of Market manipulation and you
also discover the sneaky traps set by
big players to hunt your orders you know
the drill like subscribe and stick
around for the full video
imagine for a second that you are the
biggest player in the market what would
you need to do to trap Traders and make
your profits at their expense
well you need to consider where is the
liquidity what might determine retail
traders to take certain positions and
then consider the methods that need to
be applied to seduce the average Trader
to actually enter a position
this is a three-step process
first you need to convince retail
traders to take positions
this technique is done by using a range
of price movements to trick Traders into
taking a position in a given Direction
this is basically setting up a trap
we'll talk about these traps later
then you instigate traders to become
emotional and think irrationally
this involves quick price moves spy
candles were fast and random price
movements
and after retail Traders are trapped you
then hunt their stops and reverse the
price
this is the simplest definition of a
market Maker's activity
now remember what happened the last time
your stops were hunted
you were induced to take a position
thinking price is going to move in a
certain direction or maybe you were
triggered by the speed of a price
movement
then once the Trap has been set and you
took the bait price moved against you
so how to avoid this let's discuss the
most common traps used by smart money
the Asian trading session is one of the
main zones targeted by the smart money
in this example we highlighted the Asian
sessions
we see that the Asian session is not as
liquid and volatile as other major
trading sessions
and one of the most common strategies
used by retail Traders is to identify
the trend and wait for the breakout
outside of the Tokyo range
but if we look closer we'll see that
this is not a viable strategy
if we analyze these three consecutive
Tokyo sessions
we see an interesting pattern
range traders who have taken short
positions at the top of the Asian range
had their stop losses hunted outside of
the range
each time the market reversed
aggressively in the opposite direction
the upward movement outside of the range
also enticed traders to take long
positions
hoping for a breakout trade
so there's a second batch of traders who
were trapped long breakout Traders
when you have a cluster of orders in a
similar Price Zone this Zone will be
targeted by Big Market players
so if range trading could lead to your
stops being hunted and breakout trades
are also risky how do you actually avoid
the Tokyo trap the good news is that
when you know how a stop Hunt works you
can employ strategies to prevent being
hunted in the first place
remember one of the key ingredients to
stop hunting is a cluster of stop-loss
orders near a similar price
stop loss orders might be clustered
together for two reasons the Market's
pattern points people to place a stop
loss near similar levels
or Traders Place orders hoping for a
Breakout
the safest way is to enter after you
spot a liquidity clear out a move
outside the range and a quick
retracement back inside of it
buying at the top of the Tokyo range or
selling at the bottom of the range is
outdated and should be avoided
[Music]
smart money also induce traders to take
the wrong direction by using sharp and
aggressive moves near the high or low of
the day
one of the ways of identifying that you
are in the right place is that the
market will seem to be quiet in
consolidation and make a sharp move out
of the range faking the Breakout
if you were to take a trade in the area
of the high or the low of the day
you might notice that price has some
activity
you'll see the quotations changing
but the actual movement is little
ticks are moving up and down suggesting
that there's lots of activity
but in fact there is little movement
in this case a reversal might be on the
cards
the stop hunt involves a deliberate
movement outside of the range to what
will become the new high or low of the
day
the stop hunt has two major objectives
to take out existing stops
and to encourage traders to commit to
new positions in a direction that is
opposite to where the real trend is
going to be
it is common to see price undergo a
further price of accumulation which
induced traders to take further
positions
and when there are enough positions the
price is moved in the direction of the
true trend
and their stops will be triggered
also there is often a second move to the
high or low of the day and most of the
time it will fail to take it out
face forms the typical M and W patterns
a wedge or a triangle is a common
pattern which allows smart money to trap
traders in both directions
in this example you can observe that on
the lower boundary of the wedge
the lows become slightly higher each
time it comes down to the line
this has the effect of ensuring that
none of the traders that are taking
short positions in these regions can
turn a profit
similarly on the upper boundary of the
wedge the same thing is happening with
each of the highs becoming progressively
lower and trapping the higher level
lungs and pulling them down
there is no way of predicting which
direction the price will break
this is determined by the net volumes
that occur
in other words if there is a greater
buildup of short positions over the long
positions then the wedge will break up
[Music]
during Market open the smart money
trapped novice traders to believe Market
is moving in One Direction
but in fact reversal is just around the
corner
I call them morning reversals
often you will see prices moving in One
Direction very strongly from the opening
bell
the momentum is so strong it creates a
parabolic curve
it makes you regret not entering early
but don't get trapped these parabolic
moves often get reversed
the psychology behind this is simple
the trend is healthy when it's made of
average Trend bars consecutive Trend
bars and small Corrections but when the
momentum gets out of control with such a
parabolic curve with large bars and
without pullbacks the market control has
to be restored
price is only favoring one side
resistance will be met
keep this in mind when you see volatile
movements in the early morning
when you see clear signs of failure or
exhaustion counter it
[Music]
accumulation and distribution periods in
the market are a constant process of
Exchange
the difficulty is to find what variables
might indicate that the market is in the
accumulation or a distribution phase
it's all very clear after the fact but
find variables in the live market it's a
harder task
this phase starts with the resetting of
a daily high or low
then follows a period where tends to be
legal activity
and the market just Cycles back and
forth between two price points
after a while the range begins to widen
this has the effect of triggering
bending orders placed by breakout
Traders
smart money gradually accumulates as
more and more Traders begin to Take
debate
however
when they are triggered the price is
quickly pulled away and they will often
be stopped out on the other side of the
range which is also widening
your play here should be in the first
place to find the spring the fake
breakout out of the accumulation phase
and then to trade in the opposite
direction of this failed breakout
the move out of the consolidation area
tends to be very sharp and short
the first thing you need to see is a
large sideways consolidation area
generally the longer the consolidation
the more powerful the resulting thrust
once the consolidation is underway you
look for the spring pattern the spring
is simply a false breakout of the
accumulation area where weaker hands
expand expect a larger retracement or a
Breakout
the market breaks out of the
consolidation only to return inside the
range
in a consolidation area after an uptrend
the spring would appear on the lower
side of the range
in a consolidation area after a
downtrend the spring would appear on the
upper side of the range
in the case of a bullish spring a false
breakout on the lower side of a
consolidation area the entry is when the
market swings higher from the spring
candle
I like this approach because you can
even place a buy stop above the spring
area
and any swing higher will activate the
entry
foreign
[Music]
bars within a trading range
often you will see a large body
Candlestick with little or non-wick
taking a lot of space within a range
it looks very strong but it can also
trap a lot of traders to enter
price is rotating inside the range
sometimes breaks out for a bit flushing
out weak players out of the market
but it is usually contained within an
approximate range if a large bar is
taking all the space there is actually
no more room to move
price has Traverse
therefore when you see a large body
candle in the middle of the range don't
enter it's a possible trap so faded
if you look in your chart history you'll
see that most large bars inside of the
range are countered instead of being
followed up
one other aspect to keep in mind there
are always Traders on the other end of
the giant bar ready to counter it and
scalp for a quick profit
if you pull up a chart you can see large
range bars are usually not followed up
with continuation during a range
psychology behind this is simple traders
who profited from this large range
candle are exiting
therefore there are more circumstances
where a large body bar is followed with
a small pause or even a pullback before
it's continuing its trend
here are other failed large Body candles
inside of a range
they are huge in size but they are not
representing any strength
they have no follow-up and are being
countered one after another
as a side note not all high spread bars
are fake the key is analyzing them
within context
so be aware of the size of the range
when scalping against These Bars
if you want to see more videos like this
one give us a like And subscribe
and check out our Academy program if you
want to further level up your Trading
until next time
No comments:
Post a Comment