The psychology of the trap: why do we always fall into it?
Market Makers know exactly how the small trader thinks. When the price moves slowly, you hesitate to enter. But when that explosive green candle appears, your adrenaline spikes, and your mind whispers: "This is the big explosion, I'll lose my fortune if I don't enter now!".
Here lies the trap:
Liquidity: For the "whale" to sell large quantities, it needs thousands of small buyers. The green candle is the magnet that attracts these buyers to provide the necessary liquidity for the big players to exit.
The thrill of the false breakout: Often, a previous peak is broken by a strong candle to mislead you into thinking the rise will continue, while the truth is "Stop Loss Hunting."
2. How to catch the "prey" (portfolio liquidation)?
The liquidation process is not a coincidence; it is precise financial engineering:
The bait: a fast and enticing green candle.
The trap: Entry of high leverage players at the peak.
The sudden rebound: A rapid and unexpected drop hits stop points.
The domino effect: Liquidating one portfolio leads to forced selling, causing the price to drop further, resulting in other portfolios being liquidated... and so on.
3. Survival guide: How to stop being a "prey"?
If you are tired of seeing red after entering immediately, follow these strict rules
Golden tip: If you see green candles stacking up, look for an exit door and leave immediately, even if the profits are small.