We would show you the importance of the trapped trader’s setup, for both the long and short trades. The tactics we mention can be used to any time frame. Is it necessary to understand the trapped traders? What is a trapped trader? You can learn lessons from trapped traders because they lose money often in the market, and they show you the wrong paths they take so from that you can learn lessons. There are two kinds of trapped traders, and remember, at times when you trade the Forex market you may also fall into these kinds. The ultimate target is to provide you the lesson that you should learn from the trapped traders in order to trade better trading opportunities in the market.
What are the two types of trapped traders
There are two types of trapped traders such as trapped in the long position and trapped out of the winning trades. What should the traders who are trapped in the long positions do? They should exit the trades by placing the stop loss. The other type is the traders out of the winning trade; they are as an example, if you are in the long positions and the stop loss hits you, then after the price shows up you will be moving towards the original price target. So can you understand the types of trapped traders now?
The problems of the trapped traders
Actually, it’s true that Forex is complicating and hard to trade but still because of the anxiety by the ones who enter the trade it becomes even more complicating. When the people enter a trade with the panic feeling and when the witness that the market is moving against them, they become trapped in the position.
The pullback traders also fall into trapped traders at times
The Forex market moves with corrective moves but it’s in the hand of the traders to take the chance. There are sophisticated pullbacks and it could be hidden inside the higher timeframe, and the easy pullback may be seen in as two-legged pullback in the smaller time frame. Price increase turns the traders who are in the longs into the trapped traders and brings out the stops. It may tempt the traders who will wind up when the price changes in the previous direction of the trapped traders.
Summary: the simple way to trade the Forex market is to find out the strategies that work for you although it may change according to the market movements. You should change your perspective, you think like the trapped trader but you should not act like them or trade like them. To be honest, all the traders in the market were once trapped in some instances of the trading life. Once you understand the ways to think like the trapped traders you will be able to avoid being like them. Anyways, the trap are very crucial examples since they act as a lesson for other traders.