The shark trap, or simply the trap, is a trading strategy that is the opposite of the shark trading rules, which exploits the shortcomings of the following trading (especially the shark method) in many false breakouts to profit (making the shark a shark to eat).
In the early 1980s, there was a very famous group of traders called the Seagulls. The legendary market master Richard Dennis, who created the trading legend, came up with this interesting name when training a group of new traders. Richard believed that training traders was actually like raising seagulls in Singapore.
More than two decades later, the beach method is no longer a secret and many people know about it. Still, why are so few people still trading successfully with it? That's because following a trend strategy often requires enduring large and long pullbacks. Many investors or traders don't have enough capital or are willing to stick to these long-term losses.
This is called the "Street Smarts", as opposed to the "Street Smarts" by Linda Wooski and Larry Connolly. The reason most strategies fail to stay profitable is that once many market participants use them, the profitability of these strategies deteriorates. This is the way the market balances those imbalances. What do you mean? The original rules for trading in the shell were at least a series of trading sessions or longer sessions, ranging from a week to a month. Ms. Waski used the shell strategy to make shorter intraday or wave trades, concentrating on high-frequency occurrences of false breakouts. Generally, the 20-day cycle used by the shell trading method is a breakthrough: a breakthrough of the 20-day high is bought, a breakthrough of the 20-day low is sold.
1, when the market breaks the 20-day high (or low), do more if the market breaks up, if it breaks down, free up space.
The lows on the 2nd and 20th must occur four trading days before the trade.
3, if the price falls below the 20th low and falls below 5 to 10 cents, a stop loss can be placed 5 to 10 cents below the break (note: a stop loss is not limited to a stop loss on an existing position, but can also be used to open a new one). For example, if the 20th low is $10.53 and the market falls below $10.43, a stop loss can be placed between $10.47 and $10.43, and a new one can be bought once the market returns to $10.47 to $10.43.
4. Once the payment has been made, the stop order is placed 1 cent below the day's low. Stop order is placed at $10.31 if the day's low is $10.32.
5. When a trade is profitable, set up a tracking stop-loss order (Trading Stop, a common stop-loss order in international markets that triggers a transaction when the market returns a certain fixed size or ratio). The tracking stop-loss order is 10, 20, or 30 cents, as determined by the trader based on the stock price or volatility. For example, a 30-cent tracking stop-loss order is more reasonable for a $20 stock compared to a $5 stock. Similarly, a 10-cent tracking stop order is more reasonable for a $5 stock.
6, positions can be held for hours to days.
7. If the holding is stopped on the day or the next day, the trader can try again. This is also at the discretion of the trader/investor.