Stop worrying about traps. No one is trying to squeeze a guy with 5k in his account (except his “forex broker” ofc). Start from the perspective that stock prices between informational events move in a random walk, which means all patterns are “traps” (e.g. not presenting any opportunity, though they look like they do). From that point you can layer information such as incremental change in flow, moves in peer companies, positioning by large investors (13-F), and earnings revisions. Pretty much your signals should be stuff that can predict future change in volume. Focus on smaller stocks (200mm to 1b in mkt cap) because the slow diffusion of information is more prevalent here.
You could use Long Put options instead of Shorting the Stock. Same target, but with the Long option your risk is much much lower: it's just the price of the Put, which is usually a fraction of the underlying stock... Other advantages: less capital needed, no collateral (margin) required, easier to obtain (shorting stocks is not always possible as you have to borrow it from the broker, if there's any avail at the moment...) If you need a practical example let me know.
Be aware, but focus on your own strategy, and don't get preoccupied with what others are trying to do, you will forever be second guessing yourself
Anything that seems to be too good to be true is a trap that you should watch out for. The best thing to do is build your trading plan and don’t distract from it, no matter what. This will keep you from any kind of traps because you would already have a track that you need to follow.
right. there are so many types of traps : bull trap, bear trap, whale trap, maxinger trap ... don't bother about those traps. those are craps. just focus on the charts. Important thing is to enter during the early part of the trend and trade with the trend. And when there is a signal to enter, don't hesitate to enter. Don't be fearful of those bull trap, bear trap, whale trap, maxinger trap ... Because when we are overwhelmed with fear, we wouldn't be able to pull the trigger. And we might miss the trading opportunity.
When you were studying forex trading, you would have read that making money in the forex market is not going to be easy and you will have to work hard. And that it will take time for you to become successful at forex trading. But when someone tries to sell you a system that promises to do all this easily, they probably are trying to scam you. You better stay away from such deals.
Relatable! For most of the time on forex, FOMO always bothers traders and this is the trap , they see that everytime there is an opportunity and in this greed they take implusive decision which is actually a trap.