[rxs0005]

hi all

In Intraday charting how do you recognize a Bull trap ,

I see that a stock is showing a up trend and has reversed from its down turn but very soon it reverses the direction and continues to head down

I have been caught in that bull trap

how does one recognize this pattern

thanks for your in sight

rxs0005

[shrike]

only after it's happened i suppose

[shrike]

I 'm studying if a divergence betwenn price and oscillator that measure strenght of trend could be signs a bull or bear trap but its difficult find a good oscillator that works well

[shrike]

Now i see a divergence on ES could be a good chance ?? maybe stop thin

[rcoolkarni]

Originally Posted by rxs0005 »

hi all

In Intraday charting how do you recognize a Bull trap ,

I see that a stock is showing a up trend and has reversed from its down turn but very soon it reverses the direction and continues to head down

I have been caught in that bull trap

how does one recognize this pattern

thanks for your in sight

rxs0005

I am not sure about the specifics and not sure what is your definition of Trend but here are somethings I can tell you to watch .
1) Where the market internals in line with new trend?
2) Always watch for important price levels ( Previous session high/low, Globex Hi/Lo (in futures)). Most of the time the price retest these levels couple of times (sometimes overshoot a little to take out stops) before starting to moving in other direction.
3) Watch for Price Action. You said up trend - did it have bull candled with large bodies each having low above the previous candle low which represent a trend up? or they were combination of bull/bear/doji candles representing profit taking from previous move rather than representing new trend ?
I do not use indicators so cannot talk about that. Above things are not fool proof. It is possible that you looked at all the above things and they all represented that the trend had changed, but even then the price can move in opposite direction because Price can do whatever it wants and that my friend is just part of trading

[rcoolkarni]

Originally Posted by rcoolkarni »

I am not sure about the specifics and not sure what is your definition of Trend but here are somethings I can tell you to watch .
3) Watch for Price Action. You said up trend - did it have bull candled with large bodies each having low above the previous candle low which represent a trend up? or they were combination of bull/bear/doji candles representing profit taking from previous move rather than representing new trend ?

To elaborate more on point 3 - look at the attached screen prints. The first one is YM 150 tick chart as it is happening now (real time) - the up and down gyration (almost cyclical) is most of the time consolidation. Off course this could turn out be a trend but i can only make decision based on whats happening now. The second image is from Friday for ES has 2 markers. 1 st one is again a cyclical gyration (consolidation) where as take a look at the second marker see the difference (reversal). second marker does not have the cyclical gyration.

[aadambell]

thanks "rcoolkarni" i have stuck in that trap two times. I will be careful from now.

[Worshire]

Most of the time it is when the mv averages cross that is the time trend changes directions.
So you have a bunch of order causing large parabolic moves