Page 5 - Module 12 Consolidation

Module 11 – The Fibonacci Science

Place an order to sell 10 pips below support
Your protective stop order should be at the last High if you are selling.

Protective Stop Order

The Sell Entry

Your protective stop order should be at the last low if you are buying.

6. bull traps trading currencies

A bull trap occurs when the market is in an uptrend and the market starts to bracket, accumulate or
consolidate, creating tight levels of support and resistance with no anticipated fundamental
announcement. The bulls let it break out to the south taking in or out the traders who have stops at
the lows or at support. Traps are very common when you see accumulation and no fundamental
announcement ready to take place. If you have straddled the market and there is no announcement
and the preceding trend is bullish and the market has taken you in short and turns around and
comes back into the center of the accumulation, you have been trapped. The market has a high
percentage chance of reversing and going in the direction of the preceding uptrend.

7. bear traps trading currencies

A bear trap is just the opposite. When the market is in a downtrend and starts to bracket, accumulate
or consolidate creating tight levels of support and resistance with no anticipated fundamental
announcement, the bears let prices break out of resistance taking in or out the traders who have
stops at the highs or at resistance. Traps are very common when you see accumulation and no
fundamental announcement about ready to happen. If you have straddled the market and there is
no announcement and the preceding trend is bearish and the market has taken you in long and then
comes back into the center of the accumulation, you have been trapped. The market will have a high
percentage chance of continuing short or in the direction of the preceding downtrend.

8. whiplashes in trading

A whiplash is when the market is in either an up or downtrend and then it starts to bracket,
accumulate or consolidate, creating tight levels of support and resistance. Fundamental
announcements may create a whiplash effect. The bulls and bears are at war trying to take control
from each other. In their struggle prices break out either to the north taking in or out all traders who
have stops at the highs or at resistance then reverse to take in all the bears who have stops at the
lows or at support. If that isn’t painful enough, prices then quickly reverse and come right back into
the consolidation. If you have straddled the market and you get caught up in a whiplash you are
locked into a loss. As with the Bull and Bear Traps, the market will have a high percentage chance of
continuing in the direction of the preceding trend.
days.

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