The difference between Money-making zone and trap-zones

This post is to answer questions of a reader, and also hope to help other readers to understand these two fundamental concepts as well.

Below is copied from the comment:
"but I am still confused on the difference between Money-making zone and trap-zones.

1. Can we have trap-zones inside a Money-making zone?

2. within a money-making zone, can the prices go against the trend temporarily? (eg. in a bull money making zone, there was a day or two the index went down?)

3. can I say that a price move (hight or lower) inside a trap-zone is a money making zone with a shorter time dimension? "

My answers are listed below:

1. No.

2. The money-making zone is a TREND in a time frame, say 30m chart as an example. For bull's money-making zone, the start point should be a bullish pivotal point, and the end point should be the bearish pivotal point. Namely, you can draw a line from the start point to the end point of the bull's money-making zone, and the line is pointing UP. It's a straight line, no zig-zags. Of course, the prices can go against the trend temporarily, but the key is no pivotal points are created. Other wise, the line will become zig-zaged.

3. Yes. The trended moves in one time frame's trap-zone can be viewed as a money-making zone in the scaled down time frames because the trap-zone can be decomposed to a combinations of trap-zones and money-making zones in shorter time scales. The motions are correlated across different time frames.

I suggest to read and try to understand the complete summary on the subject, which can be found here.

More important, applying them to the daily chart reading !