Get Mark Chapman's Free Daily Trade Calls - Click here: http://mytotalsupport.com/cpv/base.php?c=119&key=c335fd1ebae1ef722be28559d78941b3&ls=youtube&keyword=currency_trading&ad=SR5bOVhH1as The trap we’re going to look at today is on a four-hour chart of the AUDUSD, and this trap is what I refer to as a trap break pullback failure trap. It hasn’t quite developed yet, but it’s starting to look pretty good. This trap occurs when a level of resistance is broken and the obvious entry is to go long and price pulls back into that prior level of resistance because traders will believe that this is now support. The trick is that it did actually start heading higher at first, but then it failed and dropped through the level. So, now what traders will be thinking is that this underside would be a good place to go short on a retracement, and that’s what started to happen. However, as you can see, traders have been squeezed now in those short positions. Now, this still could work out to the downside as there’s still traders trapped in this area here. And because they were buyers, they must sell to exit. And the reason they may wish to do that is because when that level broke down, they may be thinking that this trade is finished with. And if they get the opportunity, they’ll exit and break even. So, as price pulls back up into that area, where these traders are trapped, if they exit at breakeven, that’s essentially a sell transaction, which could add to supply, which is why I’m saying that it could still drop. However, if this moves strongly through this level and beyond this area here and stops continue to rally, this looks like a good place to get long because those traders will now be trapped to the downside in that area there. So, it’s not quite there yet, but it is developing, so this is one you want to keep an eye on, but only trade this if the dollar is weak, so check the dollar index before you enter and make sure that the stock market is rallying because commodity-based currencies do better as stocks go up. https://www.youtube.com/watch?v=SR5bOVhH1as Disclaimer: This video is for general information only and is not intended to provide trading or investment advice or personal recommendations. Any information relating to past performance of an investment does not necessarily guarantee future performance. Forex Traders Daily including its analysts shall not be responsible for any loss that you incur, either directly or indirectly, arising from any investment based on any information in this video. Please remember derivatives and FX spot carries significant risks and may not be suitable for all investors. Losses can exceed your deposits.
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