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YTC Price Action Trader (www.ytcpriceactiontrader.com)

  #45 (permalink)

Elite Member
London, UK
 
Futures Experience: Beginner
Platform: NinjaTrader, home-grown Java
Broker/Data: IB/IQFeed
Favorite Futures: EUR/USD
 
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Posts: 1,085 since Dec 2010
Thanks: 471 given, 778 received

For me, Lance's concept of 'trapped traders' sounds like an intuitive explanation of the way the market will move after interaction at support or resistance - or in one of the supply or demand zones that are discussed on this thread, I assume.

However though the trapped traders concept feels intuitive when reading about it, I find it really hard to learn and practice. I guess it's the paradigm shift I'm having trouble with: too frequently I end up looking at the setups in a purely technical way (candle patterns, trend strength etc) and I forget to analyse whether there might be trapped traders in there or not.

I am though training myself and currently I ask myself this question when looking at a potential setup:

What are the retail traders doing - in other words, people like me up to this point in my trading?

- those in drawdown who got the last setup wrong and want to exit at break-even

- those who are in profit at the last setup and should have exited at that price and thus want to exit there at the next opportunity

- those who missed the opportunity completely and want a second chance to enter, on the retrace

A better description of the concept would probably be easier for someone with more experience.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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