Understanding Range Traps
After an impulsive move, the market tends to enter into a consolidation.
This is the zone where buys and sellers fight to win the next move.
Of course, whenever sellers and buyers are fighting - liquidity is built.
In this example, sellers attempted to sell from the structure only to be stop hunted before the true move to the downside.
Likewise, buyers would have got activated in buy stops from the structure break to the upside.
Their stop losses would have been placed below the support which again got tackled after the sellers got dealt with.
Once the buyers and sellers liquidity had been wiped the true move could continue which was to the downside.
This is the zone where buys and sellers fight to win the next move.
Of course, whenever sellers and buyers are fighting - liquidity is built.
In this example, sellers attempted to sell from the structure only to be stop hunted before the true move to the downside.
Likewise, buyers would have got activated in buy stops from the structure break to the upside.
Their stop losses would have been placed below the support which again got tackled after the sellers got dealt with.
Once the buyers and sellers liquidity had been wiped the true move could continue which was to the downside.
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