Trap zone and Money making zone

I classify a financial price movement chart into two zones:
  1. Trap zone
  2. Money making zone
Generally speaking, in the Trap zone, it is very hard to make money and even worse, you could be easily trapped and lost your money. on the other hand, in the Money making zone, there are very few traps. Therefore, you can easily make money from the price movement!

It is a bad time to trade when you try to trade in the Trap zone, as mentioned before.

An unique feature of the trap zone is full of false price moves. Due to the huge amount of false movements, many traders will be tempted and trapped !

Below is a chart example, showing the trap zone in the black box ! Good traders need to avoid such trap zone because it is so dangerous to play with!

at 7/28/2009 07:18:00 PM

3 comments:

  1. bokchoyJuly 28, 2009 at 11:56 PM

    Tiger, thanks again for the good work. I noticed you used ma250? any reason? why not ema200 or sma200?

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  2. AnonymousJuly 29, 2009 at 1:29 AM

    I got it. --yy

    ReplyDelete
  3. TigerJuly 29, 2009 at 9:11 AM

    Bokchoy, MA 250 is the 250 candles moving average, usually, it represents a trend for some time that is not short, for example, like a year. I found it is a pretty reliable signal so I use it. EMA 200 or SMA 200 should be pretty similar but represents a trend for a shorter time.
    Tiger

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