Golden Setups for Daily Profit in Market Gap Down Open

Introduction:

Golden Setups for Daily Profit in Market Gap Down Open: In this setup, we will discuss the seller trap and how it works. Let’s take an example to understand it better. Suppose in the previous day, the market closed at a certain level, and the next day it opens with a gap down.

After the gap down, if the market starts to fall, we need to know what to do. Similarly, if the market goes up after the gap down, we also need to know what to do. This setup can be applied without wasting any time. Let me explain it to you.

1. Seller Trap:

If the market opens with a gap down and starts to fall, we need to take action. On the other hand, if the market goes up after the gap down, we need to take a different action. It is important to note that this setup can be used for various support and resistance levels, including the closing price and swing levels.

In the case of a gap down open, if the market breaks the support directly and forms a green candle, we need to plan accordingly. There is also psychology behind this setup, as we cannot have full confidence when the market breaks down. We need to take a safe trade and be cautious.

2. Follow Trend:

In this setup, we will discuss following the trend. It is similar to the seller trap setup, but with a slight difference. Let’s consider a scenario where the market closed at a certain level in the previous day, and the market gap down open not breaks the support. In this case, we need to plan for a trade on the upside. Incase breaks the support , when we need to plan for trade on downside.

However, if the market retraces a little and forms a good candle, we need to plan for a trade on the upside. It is important to understand the psychology behind this setup and take note of the previous support and resistance levels.

3. Buy Trap:

In this setup, we will discuss the buy trap. As we discussed earlier, the market can open with a gap down and start moving upwards. In this case, if any resistance breaks out, we need to plan for a trade on the downside. We need to be careful and wait for the confirmation before taking any entry.

Another scenario is when the market goes up after a gap down and forms a good candle. In this case, we need to plan for a trade on the upside. It is important to understand the psychology behind these setups and be aware of the market behavior. The market creates liquidity when it needs to add more quantity. If we want to trade with the trend, we need to observe the market behavior and take the necessary actions.

Conclusion:

These are the three golden setups that can help you make daily profits in a market gap down open. By understanding the psychology and behavior of the market, you can plan your trades effectively. It is important to note that these setups require practice and experience to master. Always remember to set your stop loss and target, based on the market conditions and your risk tolerance. Keep learning and implementing these setups to improve your trading skills and increase your chances of success.