http://www.netpicks.com/dynamicprofitdetector -- Free Trend Indicator! Picture this. After your evaluation of a trading chart, you have laid out a trade plan for a particular market state and a trading position. You are not a trader that listens to outside sources nor are influenced by actions by other traders as seen on the chart that goes against your plan. As a matter of fact, you sometimes laugh when you see chart action that shows some traders are taking positions that you consider a suckers bet. That is the wrong reaction. Instead, you should be silently thanking them for their errors because it is their errors that can quickly power your trade to profit. http://www.netpicks.com/trading-position-fuel/

1. Trapped Traders
is.gd/trappedtrader

2. Picture this. After your evaluation of a
trading chart, you have laid out a trade
plan for a particular market state and a
trading position.

3. You are not a trader that listens to
outside sources nor are influenced by
actions by other traders as seen on the
chart that goes against your plan.

4. As a matter of fact, you sometimes
laugh when you see chart action that
shows some traders are taking
positions that you consider a suckers
bet.

5. That is the wrong reaction. Instead,
you should be silently thanking them
for their errors because it is their
errors that can quickly power your
trade to profit.

6. Have you ever stood in the ocean a
few feet from the shore and felt the
water draw back into the vastness
behind you? Soon, you are standing
there in water about half of what was
there before. Suddenly, the water
rushes in behind you and tosses you
forward to the shore.

7. That is like those traders that have to
exit positions because they are on the
wrong side of the market. Their action
can push your trading position to
profits.

8. It’s like the trader who sees the bigger
move starting to occur and not
wanting to be trapped out of the
market, use a market order to get in
the trade. If enough contracts are
being exchanged, late buyers can also
slam price in your direction.

9. I want to show you a recent example
of what happens when traders get
stuck on the wrong side of the market.

10. This chart shows a small range within a
range and what appears to be a
momentum break out to the
downside. Traders were drawn in by
the break of the support of the smaller
range and of the bigger range.

12. In 13 seconds, price recovers back
inside the range and a long trade is
taken.

14. 8 seconds later with the long being
fueled by shorts (trapped in the wrong
direction) exiting their positions
through buying, price flies to the scale
out target for half the overall position.

16. This graphic is one minute after the
move on the first chart I showed. You
can see price recovered strongly and
even broke above what was potentially
resistance.

18. Around these areas, you will have
break out traders as well as those
looking to fade the breaks of potential
support and resistance.

19. Depending on your read of the market
and the resulting move of the market,
these traders will also add fuel to the
move in your direction.

20. Just shy of the three minute mark from
the break below support, you can see
that decent profits are about to be
taken on the long trade on the final
portion of the position.

22. Like that rush of water when the
waves crash to the shore, trapped
traders can be quite cause quite an
aggressive move in the market.

23. Trapped in the wrong direction –
Fear of losing money
Trapped out of a move –
Fear of missing the move

24. That fear and the actions that result
can make for extremely pain free
trades.

25. The key….as usual…is the ability to
read price action and resulting
structure. There are almost always
clues to where you should be leaning
and your job, is to ensure you are
looking at the most probable move.

26. Trading around ranges can be tricky
however know that there will be
traders who want to play the break of
every potential support and resistance
zone.

27. Quite often, the break fails and these
traders are trapped on the wrong side
with only one play….exit through
buying/selling their trading position.

28. The action these traders take can
result in a more robust move in the
opposite direction causing side-liners
to jump in when they see big
red/green candles.

29. Like the trade shown on these charts,
being positioned already in the
probable move can have you hitting
price targets rather quickly.

30. You can be well rewarded if you add
the reality of trapped traders to your
toolbox. One of the simplest ways I
know is if a breakout occurs:

31. 1. Watch how strong people buy/sell into the
move.
2. When price enters back into the range,
consider trading the move back inside.
3. Allow those trapped to exit, fuel the move,
and scalp out a some profits.

32. It is extremely important to know
when you are wrong.
Going back to our second chart, let me
show a few stop areas to consider….

34. The stop at #1 is an obvious area that
if breached, the short would probably
continue and that makes this a decent
exit.

35. The #2 stop is in the area of the
smaller range and the auto stop I used
just happened to find itself in this
region. If that area breached, I could
be facing an extension of the smaller
range or a complete failure of the
upside move.

36. Either one gives me enough reason to
get out of the trade. If my trade
selection is right, I fully expect price to
continue strongly to the upside and
not find itself pausing in these types of
areas.

37. It takes practice. It takes time. I believe
that as a trader, opening yourself to
the actual realities…the actual price
moves, moves around structure, and
structure itself…is a tremendous
course of study.