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MiguelS

Advice on avoiding bull and bear traps?

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Hi all,

Lately I've been having an issue with trying to trade breakouts but constantly falling into bull or bear traps. For example, today I longed NIO when it broke yesterday's value area, but it promptly reversed and stopped me out.

 

I'm thinking of delaying my entries a little bit so that I can get more confirmation, at the risk of missing part of the move.

 

Any advice on avoiding bull or bear traps?

 

Thanks!

Miguel

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Was there a volume spike when the price went up? That’s a strong correlation that there is a demand vs it being a weak push upwards/downwards?

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I think so, yes. I went in on the hammer candle as per the screenshot below. Two candles back, the big bull candle had high volume.

Screenshot 2021-07-13 141833.png

Edited by MiguelS

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I think it was just a bad break. In hindsight you could have bailed out at the 2nd lower high candle after entry. Looks like you stuck to your play book which is good.

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