This is how the market traps retail traders. Most professional traders are looking for this kind of trap to get into a trade, again experience is a prominent requirement to spot this and save yourself from the same. Any sudden momentum looks way juicy and lurking to retail trades as it is profitable in real as well but most of them ended up losing money. Keep looking for such traps and save yourself from the same. Happy Trading :)
Here is the screenshot of the same trap in 5 mins chart: Chart 1: Chart 2:
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Updated Fall:
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Trade consisted of multiple major indication's:-
1) Pending retracement in daily as well as weekly time frame after touching all-time high levels. 2) Continous retesting of Principal Pivot and Central CPR. 3) Negative sentiment since opening 4) Rejection from 50 EMA 5) Weakness in MACD Histogram
Hello there @abhi1rana, at the beginning of a good fall in intraday trading, you can most probably find this type of pullbacks just to create new temporary buy sentiment especially for NEW intraday traders, they make their buy positions there in FOMO and few mins later the initial sentiment continues (positive or negative at a higher time frame). They (new traders) have 2 choices 1) to wait for a longer time just to minimize their loss OR 2) have to square off their trade-in loss. Most of the time it will hit your SL (if you are lucky enough) and then fall.
PS: Views and Observations are my personal. Plan your Trade and trade your plan.
zAngus
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Nice call. Can you explain more in your original post as to why you thought it was going to be a trap? I think it would have caught me too.
@Umang_Sharma, if it had had more of that information in the original post including showing MACD etc I would have considered it Editors Choice worthy. Good post.
Umang_Sharma
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@Angusmck Thankyou for your suggestion ill keep that in mind 😇