Definition of "Last Trapped"
For those of you who are not familiar with my
set ups, here is a definition of "Last Trapped"
I refer to "Last Trapped" areas
as being areas where traders who were shorting or covering long
positions were left behind as the market moved up fast. Traders who
were maybe not using a stop would have been trapped there, and as
the market moves back up to that area those traders will be looking
to get whole again and buy the market.
I often incorporate "Last
trapped" areas in finding the next day's support and
resistance levels. I cover "Last Trapped" areas in depth in my course "Read the Greed-LIVE!:Vol.II"
To watch a video of "Bounce to
Last Trapped", CLICK
QUESTIONS/ANSWERS FROM "LAST
Q: Does a Double Bar reversal coincide
with a tick divergent?
A: A double bar reversal does not have to have tick divergence; if
it does it just adds more weight to the trigger.
Q: Do you use smaller ema to help for trigger entry?
A: I don't personally, but on a one min chart this might be helpful.
The one minute chart I use has a 9 and 18 period ema for a trend
guide in a good momentum move. If that crosses on a turn up from
support, it should be helpful for a trigger. Vise versa, on a turn
down from resistance.
Q: Do you have trading room open daily?
A: The instant messenger room is open daily as a complimentary
addition to the nightly updates. (see
Q: What are the prices for the e-book and trading room?
A: We have
a combo package available
which also includes a 3 hour audio from a teleseminar that I did
several years ago. The combo package is $138. This includes a 2 week
"real time" trial of nightly updates and access to our instant messenger room. (see
Q: How can you tell if the support or resistance will hold or break?
A: Let's take resistance first, if the market is in an uptrend with
good momentum and then begins to stall out as it approaches
resistance and especially if it coincides with a tick extreme then I
expect that resistance will hold. If in this same case, price runs
up to resistance with no sign of a turn or loss of momentum, then I
step back and wait, as the odds are not as good if that happens. You
can turn this around for moves down to support. If the market is
dropping and then begins to slow as it reaches support, and we get a
tick extreme at the same time then chances of a bounce from that
support have a better chance of happening. If the market shows no
sign of stopping at support, then I back off.
Q: Do you think it unwise as a rule to sell resistance, and buy
A: I think it's unwise to blindly sell resistance and buy support.
Better off to judge the action as support or resistance is
approached. (See answer in above question)
Q: Do you ever try to bracket support/resistance when you're not
sure if it will break and trap the shorts or longs? In other words
bracket so your stop reverses lets say?
A: No, I don't do that, primarily because sometimes there will be a
poke above resistance/or below support that gets quickly reversed,
for instance "the prarie dog" (found in my
e-book) So, if I were bracket trading this, and the market did
as noted here then I would be a "last trapped", I would be caught
just as the market does make a turn. I know this isn't always the
case, but the brackets just seem a bit risky. What might be a better
idea is to see if that support/resistance is held on a pullback
after the breakout, as that can turn into a good entry point.
Q: How do u define a stall and on what chart?
A: A stall is when price basically stops moving in one direction or
another and begins to move sideways. On this I like to watch the
shorter time frames, the 2 min. or 1 min chart, as that gives you
more bars to watch. As for how long a stall lasts, it could be for
as little as 3-4 minutes, or as long as maybe 15 minutes at the
Q: During the day when you say it's good for a scalp, how many ticks
do you suggest?
A: I'm usually looking for 4-6 ticks.
Q: I'm taking too many 3 - 4 tick losses, any ideas?
A: I don't know the particulars of your situation, it could be
different things. It could be that your entry is a little early, or
a little late. Maybe your entry is not at a valid support or
resistance area. I would have to have more information in order to
help you specifically.
Q: Why a 5min tick, do you ever use 2min tick?
A: No, I don't use a 2 min tick; however, I do think it's a good
idea. I'm just used to a 5 minute tick because that's how I set
things up years ago and have gotten used to it (I'm a trading
dinosaur). However, i can see that using it on a 2 min basis would
give a more clear view on the action of the tick. Good question, I
may just begin using the 2 min tick myself.
Q: I see more waves on a 2min tick, why do you like the 5min tick?
A: Good question that I get quite often. (Please see answer above)
Q: On a "1-2-3" top does the pattern stay in effect as long as the 2
does not exceed 1?
A: A "1-2-3 top" is one of my set ups found in the
e-book. By definition, the "1" is a high for
the move, then the first pull back would be the "2", then the bounce
back towards the high would be the "3". The "3" should not take out
the previous high (which would be "1") for the set up to remain
Q: Do you get in all at once or do you add?
A: The majority of the time on day trades, I put my normal position
on all at once, and either scale out (take off 1/3 position at 3 or
4 ticks, tighten stop, and keep the rest until it looks like the
move is about over), or exit them all at once. On swing trades, it's
different. I start with a smaller position and then add when proven
correct (when the market has gone the direction I expect) or, there
is a set up to add to the position (i.e.: like a pull back to "last
Q: How many contracts do you trade?
A: I trade in multiples of 3. For instance, 3, 6, 9, 12, etc.
Q: Why do you use a 13 min chart? 405 min divided by 13 is an uneven
figure and the last 32nd candle has only 2 minutes?
A: I suppose I could use a 15 min chart, and I do that on the cash
indices. However, I like 13 min chart because not everyone is
watching that one, and It gives a bit of a different view of the
Q: Do you enter the market with an "at market" order or limit order?
A: In most cases, I enter the market on a limit order. That way I
have control on where I get in and out. You can use a "market if
touched" (MIT) order to exit at a predetermined level, or a market
order even in those cases. However, in most cases I like the use of
limit orders. Sometimes getting an entry at your price may not get
filled and then the market moves your direction. If this is
happening to you, then consider either joining the offer (on a short
trade) or joining the bid (on a trade on the long side).
Q: Is the Tick necessary when trading the "last trapped"?
A: No, it's not necessary. However, if you get a tick extreme, and
then a stall, it would help with the set up. Sometimes there are
tick divergences (the tick will go up and make a high, then it will
pull back a little bit, and then bounce back up to a lower high
before turning down again - vise versa on the downside) at last
trapped that can help you time your entry.
Daily Trading Log
Copyright 2015 TradeStalker.com and Mike Reed