Capitalize on Trading Traps

With most of our favorite markets trading inside of ranges, we know there will be lots of landmines and traps to fall into on Wednesday morning…

My goal tonight is to help you not only avoid the most common traps, but identify reliable opportunities to take advantage of the traders who don’t see them coming — Are you ready?

Crude Oil has Traps Set Everywhere (See them?)

Crude Oil is bearish and trading at the low of a trading-range, which tells me to look for buying opportunities using seller-failure patterns with a target going back up to the high of the range on Wednesday.

And remember to stay out of the middle – because one of the most common traps in a range-bound market is trading inside the middle!

E-Mini S&P Wants to Re-Test the Range High

E-Mini S&P is bullish and trying to finish it’s rotation back to the high of the large trading-range from last week.

Knowing this, I’m looking to buy a pullback, and I can see a great spot to look for buying opportunities at the combination of the low of the range and the low of a new Hidden Channel.

Nasdaq Has Four Big Clues for Wednesday

Nasdaq is bullish and trying to finish it’s move up to re-test Sunday evening’s high, which tells me to look for buying opportunities at key support levels for the most reliable set-ups on Wednesday morning.

And my focus on those pullbacks is the combination of the Hidden Channel, trading-range expansions and reversal-line support levels, all down around the 7440 area.

Gold Looks Ready to Launch, But Wait!

Gold is bearish but trading below the low of a small trading-range this evening, which tells me I have the opportunity to catch the ‘pendulum swing’ running higher with the right entry set-up.

The challenge is going to be avoiding the range – because the most common traps we see during range-bound markets are getting sucked into the middle.

My plan for Wednesday is to wait for bear-traps, preferably at the low of a new Hidden Channel, so I can avoid trying to “buy high” going back into the range.

Euro is Back Inside the Range (Again)

Euro is bearish and sitting quietly back inside a narrow trading-range, reminding me that I need to stay patient and fade the breakouts only when they have a good risk-reward-ratio.

In other words, the size of the range is the big concern – telling me that there isn’t enough room to trade inside the range, so I need to stay patient and wait for entry set-ups only after we see a relatively large breakout of the range.

“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”