Specialists’ trap
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    Super Moderator Gulfstream's Avatar
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    Specialists’ trap

    This idea belongs to Richard Wyckoff, who in 1930 wrote stock exchange trading manual. I appreciate the works of Wyckoff, because in 1966 and 1967 I worked directly opposite the library in Carmel, California, where Wyckoff wrote much of that later given to the library. Once as fate willed during the lunch break, I came across his works, and then for the next year I was breaking bread over his records.

    Wyckoff’s concept includes the idea that markets are being "controlled", in all probability, not by a manipulator, as you might think, but rather by a collective consciousness, a kind of large amorphous "they." These "they", as Wyckoff taught, move the market in order to draw the traders in a game at the most wrong time.

    Operation specialists of the New York Stock Exchange room, keeping the records of the share price, were often accused of "run" and rigging the prices to lure traders into a trap. Here appears my term "specialist’s trap" but I do not accuse them of any manipulation - the matter is in a much more cosmogonic nature of price movements. I know the experts: Bill Abrams, one of them, has been a friend of mine for 15 years, clearly proved to me that they had not manipulated the stock price.

    "Sales Trap" - is a good upward trend market, moving in the same direction for 5-10 days, and then breaks up with a bare close above the whole range of trade. The real minimum of the breakthrough day becomes then the critical point. If it breaks down, or is reached in the next 1-3 days, it is likely that an upward breakthrough was false, and traders overstocked for noting. They were caught in an emotional purchase, and stock or commodity futures distributors probably unloaded on this flurry for account of masses.

    Another "specialists’ trap" – is a "purchase trap," the opposite of "sales trap." It appears on the market going down trend, which then stabilizes in the lateral movement within 5-10 days, and then breaks down, bare close below the lows of all daily trading range. Theoretically, you should think that it will drag the prices much lower. Indeed, it often happens this way. However, if there is a sudden improvement, which raises the price above the true maximum of the breakthrough day, it means that there was almost certainly a pivot of the market. All sale-stops below the market went off, and the buying public is now afraid to open the long position at a pivot point.


    Larry Williams

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    Super Moderator Gulfstream's Avatar
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    Let’s consider a few examples:

    GF - that's a great example of the "purchase traps"




    ZB - a great example of a "sales traps"


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    Super Moderator Gulfstream's Avatar
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    Important Note: this also works for shorter periods.

    Over the years, I've seen a lot of successful deals with the use of "traps" at 5 – 30-minute and hourly price chart of market activity. You, the very short-term traders, need to add them to your arsenal of intraday trading techniques. These patterns can let you find excellent entry points.

    The secret to success, however, is that for a very strong trade you need to have something else. Something that would confirm the validity of your actions, or you‘re going to predict the price only by price. Your best deal are going to be with the use of several indicative tools for analysis, not only the price structure.


    Examples:

    Chart MAN (Manpower Inc.) M5, buy




    Chart V (Visa Inc.) M5, sell




    There is one nuance in this model - it looks especially good for american stocks, apparently because their trade involves the work of a professional, so no wonder this model is called "specialists’ trap". No matter how Larry Williams is trying to justify them, they’re kind of cheating, especially during the lunch break on the Nyse, it is about 20:00 to 22:00 MSK. At this time the market is particularly thin and it’s easier to move it in the right direction.

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    Super Moderator Gulfstream's Avatar
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    This model works on intraday forex too, but you should be more careful, because the purity of quotations is not like for stocks, I think that it makes sense to consider 30-min or 1-hour time frames for those purposes.




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    Naturally tend to be impatient, and this can make a big difference in results. Mastering aspects such as psychological factor, can be as important as the mastery of technical skills and sensitivity to interpret what the market is saying through price behavior. The key is to have a method that can be followed continuously and is consistent. It seems that the path to success would be shortened if accompanied with better risk management along with improved inputs and outputs in the trades.

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    trap very usefull to long trade.
    if scalping trade , daily trade i think not good

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    It seems that the market has characteristics that require time to understand and master them. Important to allow sufficient time for this to occur. A good deal of dedication and determination to follow a planned path and overcome any difficulties can make the process easier. The crucial factor is the risk management along with use of favorable odds. Most traders become profitable if they gave enough time and space for their open positions working with market fluctuation. The key issue is the study and practice enough.

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    sometimes trap it should not be in a few brokers, and maybe we need to be vigilant in this regard because we could just plug the trap at the time of our news and may profit in anulir or canceled, and it may be, as some brokers have trading rules and this can make us think how to get pips safely trap

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    I believe that there are some individuals who operate the return market to their advantage every once to time. I do not think there a combined awareness. Sometimes, some financial commitment resources or excellent investor can optimum a particular forex couple with considerable quantities of money.

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    In volatile markets is not how much capital it will have to set themselves long-term results. More than anything is imprescidivel consider the leverage factor and composition. A trader making only 0.5% per day consistently using 1:100 leverage makes the initial capital afterthought. The key question is how to do it consistently for a considerable period.

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