Most Effective Stock Trading Pattern | Easy Way To Swing Trade Stocks and ETFs


Tell me if you relate with the follwing scenario. You trade this chart, you see that the trend
is down, all indicators are pointing down, and you spot this imminent breakout to the
downside. And you go short, confident that the price
has nowhere to go but down. And surprise, the price does a rapid jump
contrary to your trade. But the thing is you’re so confident that
the price will go down, so you increase your stop loss. And the price goes even higher. At this point you say yourself, ok, I’ll
wait until the price comes back to my entry point, I don’t need a profit, I just want
to see breakeven or a small loss and I will 100% exit my position. And you guessed it, the price flies to the
upside and never comes back. Have you ever felt that? I bet you have. This is how i lost my first trading account. This is a rookie mistake, later I found out
that that i entered the market during a bear trap. The bear trap pattern is a very basic setup
and one of the most profitable ones if you identify them correctly. So, in this video, we’ll discuss about the
most important stock pattern you need to master in order for you to profit from the novice
traders that enter the market at the wrong prices. Before we continue, if you are new to the
channel, make sure you subscribe, click the notifications bell and leave us a like to
show your support. So, a bear trap appears when a stock is apparently
going down in price, only to have the stock reverse and shoot higher. Some traders or investors might want to short
the market, either because they feel that the market is overvalued, or because they
feel that a correction of the trend is imminent. This counter move produces a trap and often
leads to sharp rallies. The bear trap pattern is easy to be seen. Usually, such sharp downward moves in a bull
market last for a very short time, and any bearish traders shorting the market after
the sharp sell-off are caught at the bottom of the move. You will want a recent range to be broken
to the downside with preferably high volume. The stock will need to get back above the
breakout point within the next candlestick. Also, the stock should have a decent price
range. A wide price range is critical, because will
increases the odds that the stock will have room to move. You might wonder why a bear trap works and
produces big moves to the upside. Very simple, a first wave of buying will occur
when the most recent swing high is exceeded, because of the number of traders who have
their stops slightly above the most recent swing high. Another wave of buying pressure comes into
play once other market participants realize that there are a lot of traders trapped at
the bottom of the move. And the price flies to the upside. In order to be successful in profiting from
bear traps, you need 2 things. First, you’ll want to avoid bear traps and
second you’ll want to join the upside movement once the bear trap was confirmed. You will encounter many bear traps during
your trading day. As i said earlier, the key is not to fall
into one. The trading reality is that is impossible
to avoid every bear trap, but there are several clues you can lookout for in order to avoid
these losing trades. The first one is the volume. If the market changes direction and the volume
is low, it might be a bear trap. Pay attention to this chart. We are in a bullish trend. Suddenly, the trend line is broken and the
price begins to decrease. At the same time, volume is relatively low,
which is a sign that the reversal is suspect. After the break in trend, the price rallies
back up to the recent swing and later, we noticed another break, giving the impression
that the resistance area is too strong to be broken. However, the break happens during lower volumes,
like the previous breakout. We have 2 suspicious bearish breakouts. A lot of novice traders shorted the market
in at least one of those 2 points. But the price continued to go higher and higher
and if you had shorted the market, you would have gotten yourself into a bear trap! The second clue that you might be in a bear
trap is the divergence. If you trade with indicators which give you
divergence signals, then you can easily spot bear traps. If the price breaks downwards, but the indicators
shows for a bullish undertone, then you should suspect the bearish move is likely a trap. In this example, we have a trading range and
a breakout. But at the same time we have a divergence
between the price and the oscillator, the price is making lower lows, while at the same
time the RSI is clearly moving upwards. Despite the bearish breakout we have a bullish
divergence between the price and the indicator. This is a sign that a short position would
not be a good move in this case. If you want to learn more about divergences,
make sure you watch this tutorial, in the right corner. Now, the third clue is the price action, through
bullish candlestick formation. Most bullish reversal patterns require bullish
confirmation. In other words, they must be followed by an
upside price move which can be followed by high trading volume, as I previously said. So, look mainly for hammers and bullish engulfing
patterns during these moves. This is another example of a bear trap, which
could be easily recognized with simple price action techniques. Despite the price broke the support, we noticed
a hammer. This is a famous reversal candle pattern,
which signals an upcoming price increase. But, despite all that, you will sometimes
get trapped in a bear trap. If you enter a bear trap and you have an active
stop loss order, never increase your stop loss hoping for something good to happen. In some cases it might happen, but it only
takes one bad trade to wipe out a large part of your account. So, you learned to detect a bear trap and
hopefully you are not trapped in it. How do you trade a bear trap. Here’s how it works
You identify a move coming into support, but in an uptrend. So look for the price to make higher highs
and higher lows on higher timeframes and search for periods of corrections
You look for a breakout below support (to trap the novice breakout traders)
You look for a strong bullish close above resistance
And finally use, the 50 simple moving average as the final confirmation that the bears are
trapped and the long trades are on the cards. So, in short we want the price to close above
the 50sma, after a clear breakout to the downside. And all of the conditions must happen in an
uptrend. Why? Because you want to be a trend follower and
take only high probability trades, in the direction the trend. Here is an Apple chart, with an obvious bear
trap pattern. We are in an uptrend and the market opened
with a gap down. The volume was significantly lower compared
to the previous up swings and the price retraced to the breakout level. As the price closed and consolidated above
the 50SMA, this was a good time to buy the stock, in the direction of the main trend,
and with a lot of trapped trades below us. Observe how the volume increased once again
after the upward trend was resumed. How do i know that a lot of traders were trapped
there? Take a closer look at what happened when the
price reached the exact point. Boom, the market reversed right in that point. Because trapped traders closed their short
positions and new buy orders entered the market. Let’s consider another example. We have an uptrend, with the price consolidating
in a range. The price broke the support and immediately
retraced within the consolidation area. At this point, you only need the price to
close above the 50 SMA and go long. The price took off, leaving the traders trapped
with short positions below the 50sma. And another example here. Observe the breakout area below the consolidation
area and below the 50SMA, followed by a retrace above the SMA. You don’t even have to enter in the same
day when the bear trap occurs. You just have to acknowledge the trap and
enter at the best price around the 50SMA. The same pattern in this example. Higher highs and higher lows and the price
made a breakout. In real time, you wait for the clues to see
if the price has some intentions to go back up. You already have just one scenario in your
head, to go long, so even if this breakout is real, you don’t trade it, because is
against the main trend. So you wait for the price action to confirm
or invalidate our scenario. The wick on this candle is the first clue
that the market has upward plans. Once the price closed above the 50sma, we
have the uptrend on our side and a lot of traders trapped on the short side eager to
get of their positions. Pay attention that right at this point, after
a short pullback, the price immediately bounced and rallied upward. That’s because some traders trapped at the
false breakout managed to close their short positions and at the same time, adding momentum
to our long positions. If you enjoy this type of content, make sure
you subscribe, click the notifications bell and leave us a like to show your support. Until next time.

53 thoughts on “Most Effective Stock Trading Pattern | Easy Way To Swing Trade Stocks and ETFs

  1. It daily chart or intraday 3 min, 5min , 15 min..kindly confirm

  2. If you learned something new, Subscribe & Like this video (it only takes 5 seconds but will help us a lot πŸ‘)
    β–Ά Ready for some TRADING and INVESTING action?
    https://thesecretmindset.com/academy/

  3. This channel is waaay too undersubbed, keep the good work up :).

  4. Nice information!! & superb teaching style,πŸ‘ŒπŸ‘ŒπŸ‘ŒπŸ‘

  5. Please tell me more about ic market. Are they regulated or licences broker? How is there withdrawal method like?

  6. FinBrain provides future predictions for more than 6000 financial assets using Deep Learning models, you can visit our website for more and become and early adopter of this technology.

  7. Rarely seen this level of clarity while explaining reasons behind price movement. Enlightening. Carry on the good work!

  8. Hello guys, I just found this awesome trading company. A platform with a remarkable risk management system guaranteed to trade your capital and yield over 25% profit of invested amount every fucking day!! Sounds too good to be good right? See for yourself, talk to my account manager via email at officialthomanbrown796 @gmail. Com. Thank me later

  9. I'm rich now thanks to these tips. I rode the bear trap and quadrupled my account that same day. Thankyou so much.

  10. I started Forex trading 8months ago with losses and was suggesting quite, but This Month has been a breakthrough for me in my
    whole trading experience with the Auto trade strategy that made me profit that am well happy with. Thanks for the Help of Mr James Gloves,contack me at [email protected] or call- text +19182978519 And i will shear hsi amazing stratey

  11. thank you mr ,you have done a great job ,i have a question,may i ask ,your accent sounds slavic ,are you A Russian ?:D

  12. The danger here was not the bear trap, it was the rookie mistake of NOT putting in a Stop Loss above your entry bar in case the price turns on you. If you would have done that, your short trade would have been exited and you wouldn't have lost all that $$ when the price exploded to the upside.

  13. Best trading channel on YouTube. I am very happy to find this channel. Thank you very much!

  14. Cool! In which temporary framework works best
    or in what temporary framework is it more effective to use it? Thank you!

  15. super amazing. we all thank you for such wonderful information.

  16. Would you recommend buying trending markets for long peroids of time over day trading?

  17. This scenario is so very true and is my current situation. Thank you so much for making this video, very helpful, really appreciate it!!

  18. You generosity is so great that I feel bad not watching the ads entirely.

    You are awesome brother.

  19. Do you recommend stock trading over Forex. Some channels say that a lot of the indicators, patterns and candlesticks were really meant for stocks not Forex

  20. This looks like it just happened to Bitcoin…
    (At the time of this comment, Bitcoin dropped to $9,500 on low daily bear volume 😁)

  21. One of the very few trading channels on YouTube that give you clear, evidence based, logically explained trading advice that really are core knowledge on the subject. Thank you very much.

  22. Following up on my comment 2 days ago… this video actually showed that Bitcoin did a bear trap because of low volume on the dump! It just pumped to $10,150. Bears are trapped. 🐻⚠️

  23. I joined Mr Salman weekly trading session after hearing about much winnings attained from different beneficiaries of his trading system. I traded Β£1000 and got a huge payout of Β£12,350. Certainly not going to miss out on the next session. hahaha thank you God for using him to help me and my love ones. if you need a good account manager with good strategy mail him and thank me later. [email protected] com

Leave a Reply

Your email address will not be published. Required fields are marked *