INSIDE BAR FAKEY. FOR THOSE WHO ARE UNFAMILIAR WITH IT. LETS GO BEHIND THE PYSCHOLOGY OF IT AND WHY IT WORKS.
PRICE MOVED UP OF THE MOTHER BAR WHICH WOULD TRIGGER TRADER'S LONGS, AS USUALLY TRADERS WOULD TRADE THE UPSIDE AND DOWNSIDE OF THE INSIDE BAR BY PLACING LONGS AND SHORTS ABOVE AND BELOW RESPECTIVELY.
AFTER THEIR LONGS ARE TRIGGERED, PRICE SWIFTLY CLOSED BACK INSIDE THE INSIDE BAR. THIS WOULD CAUSE THOSE WHO BOUGHT IT TO DOUBT (OR AT LEAST FEAR) FOR THEIR POSITION. THIS IS A STRONGER ALTERNATIVE OF BULL TRAP.
THERE WONT BE ANY BUYERS LEFT, AS THOSE WHO BOUGHT ARE TRAPPED AND ONCE BITTEN TWICE SHY EH? SO ONLY SHORTS ARE LEFT IN THE MARKET. AND HERE I AM SHORTING IT.
TO SPICE THINGS UP, LAST NIGHT'S BEARISH PIN BAR CLOSED BELOW 1.3900.