Trapped traders are people who lose money and their orders make a profit for others. Basically, when they are trapped, they are forced to close orders and create commands in the opposite direction. If we can predict this "trap" point, we will find a profit.

There are 2 types of Traders that are trapped:

1. Trapped in a losing stance

When a trader falls into a loss trap, what do they do?

They will have to close their orders quickly or they will have a stop loss

2. Trapped out of victory

For example, you are buying and the price falls causing you to stop loss, and then immediately, the price goes up and up in the same direction as you predicted.

So what will these traders do?

Maybe they will stand outside or rush into the market to chase the chosen direction. This also gives the price a push in that direction.

In general, when traders are trapped forced to exit or chase the market, they often cause the flow of orders to increase, thus pushing prices faster. If we detect some "trapped" positions, we will have a little more advantage.

However, remember, every method has right and wrong. There is no absolute best practice when it comes to trading in the financial markets.

A. Hikkake candlestick pattern

This is an Inside Bar (IB) candlestick pattern (inside a candlestick) but failed. It waits for the unsuccessful breakout of the IB and trades in the opposite direction. At this time, those who had traded on the breakout of IB were trapped, forced to close orders, and push prices to move quickly in the opposite direction.

Check out the Hikkake description below:


Example on chart:


B. Two trap tops

This is a 2-high pattern with the second peak slightly above the 1, causing some traders to buy into the breakup trap. Then they had to exit the order and create a command line that pushed the price down faster

See description below:


In another case, it could be a Pin Bar


Some examples:



In general, the advantage of this method is that the reverse flow of the trapped trader pushes the price away faster. This method may complement your way of entering orders.

With that said, nothing is optimal and you should consider your strengths and weaknesses, and combine with your experience to be able to win the market.