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Trading Strategies for Hidden Bear Traps

Apr 29, 2025

Market Analysis and Trading Strategy

Introduction

  • Kick off the trading week with a focus on money-making strategies.
  • Identification of "hidden bear traps" in the tick charts.
  • Game plan for timing entries and taking profits.

Key Market Clues

  • S&P SPY and NASDAQ QQQs: Both markets are overall bullish.
  • Hourly Time Frame Clues:
    • Bullish Direction: S&P SPY and NASDAQ QQQs show a bullish trend.
    • Trendline Observation: Potential for a deep pullback, indicating possible bear traps.
    • Upcoming News: Consumer Confidence Report and Jolt Report at 10:00 AM Eastern on Tuesday.

Tick Charts Analysis

  • Hourly Charts vs. Tick Charts: Hourly charts for bigger picture, tick charts for trading.
  • Important Indicators: Use of the 21 EMA as a key indicator.
  • Hidden Bear Traps:
    • Bull Range: Rotation above and below indicates potential for bear traps.
    • Breakout Pullback: Watch for pullbacks after bullish rotations.

Trading Strategies

  • Bear Traps:
    • Two-Try Rule: Look for two attempts by bears and enter on reversal.
    • Add-on Trades: Add to winning trades as the market moves in the expected direction.
  • Retest Trades:
    • Pullbacks seen as buying opportunities, rather than reversals.

Variations and Tactics

  • V-bottom Reversal:
    • When no bear trap occurs, look for V-bottom reversals.
    • Establish trendlines and look for first pullback entries.
  • Breakout Pullbacks:
    • Two-legged Pullbacks: Look for two legs in a breakout before reversing.
    • Pop and Grind Breakouts: Identify grinding patterns for momentum trades.

Further Considerations

  • Adding to Winners: Use separation from moving averages to add to positions.
  • Target Setting: Use breakout legs as measuring tools for setting profit targets.
  • Future Market Moves: Prepare for possible new trading ranges and rotations.

Resources and Learning

  • Free Trading Course:
    • Contents: Trading strategies, bear traps, range rotations.
    • Access: Link provided for free educational video series.
  • Social Media Updates: Follow on Twitter for charts and trading tips.

Conclusion

  • Join the Trade Room: Encouragement to participate in live trading sessions.
  • Final Takeaway: Use the knowledge gained for profitable trading strategies.

These notes summarize key insights and strategies for identifying trading opportunities, with an emphasis on hidden bear traps, breakout trading, and effective use of tick charts and moving averages.

Full transcript