" You can easily avoid Trap Zones in Trading By using CPR indicator" - Anil Hanegave
Understanding Traps in Trading
Traps are false moves in the market designed to trap traders into making poor decisions. Institutional players like FII & DII, with their significant resources and influence, create these traps to induce buying or selling, only to reverse the direction, leaving retail traders in losses. Recognizing these traps can help you avoid them and protect your capital.
Identifying Traps Using CPR Zones
One of the most effective ways to identify traps is by using the CPR (Central Pivot Range) indicator in between TC and BC. CPR is a powerful tool that helps traders determine potential support and resistance levels. Here's how you can use CPR to identify and avoid traps:
Set Up CPR on Your Chart: Add the CPR indicator to your trading chart. It consists of three lines: the pivot point (PP), the top central pivot (TC), and the bottom central pivot (BC).
Identify Trapped Sellers: In the Nifty 50 chart, example below, you can see a lot of sellers got trapped in the CPR zone. The red zone indicates the trap zone, where many sellers were caught as the price unexpectedly reversed upwards.
Weekly CPR Zones for Positional Traders
While intraday traders focus on daily CPR levels, positional traders can benefit from weekly CPR zones. Weekly CPR provides a broader perspective and helps identify potential trap zones for longer timeframes. Here's how to use weekly CPR:
Add Weekly CPR to Your Chart: In addition to the daily CPR, plot the weekly CPR levels on your chart.
Identify Positional Trap Zones: Look for areas where the price interacts with the weekly CPR levels. These zones often become trap zones for positional traders, where large movements can occur, trapping traders on the wrong side of the market.
How to Avoid Trap:
Wait for Confirmation: Don't jump into trades based on a single candlestick. Wait for confirmation through price action, and Location of the candlestick, and Moving Average indicators to validate your trade setup.
Practice Patience: Join Pro traders mentorship Program, to directly learn from Famous trader Mr. Anil Sir, that will help you to improve your psychology and Avoid impulsive trading. Patience and discipline are key to successful trading. Wait for the right opportunities and avoid getting caught in traps.
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