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What is A Bear Trap In Forex Trading? http://www.financial-spread-betting.com/course/technical-analysis.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE The bear trap trading setup on a higher timeframe with major currency pairs. This is a bear trap trading setup. What is a bear trap? When people are long and the market starts moving against them, they are scared of being caught out and generally there is more pain than in a bear trap. With a bear trap people are more afraid of missing out… But let’s talk about how this operates. This is on a higher timeframe chart like a daily or weekly timeframe. This would work best on major currency pairs like EUR/USD and very liquid stocks/indices. Don’t go down to the exotics; they’re too thin. The idea of this is that people are selling short or coming out of their longs as we go under the low. Obviously for fx the idea of bear vs bull is a little different because you are trading one currency against another. The technicals are; you attempt to break thru a low, you fail, you get people out their longs or you get people sucked into a short and then the market reverses. Mind you this won’t always work but the beauty of this setup is that the risk:reward ratio is big so you can be wrong multiple times. Also, you can quantify the risk quite systematically making it easy to work out stops.
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