If you’ve been trading for a while, you might have noticed a strange pattern—market reversals almost always seem to happen right when retail traders feel most confident. You enter a trade thinking you’ve broken out of resistance, only to see the market reverse against you.
This isn’t a coincidence. It’s what we call a Trendline Trap, a technique institutions use to lure traders into bad positions before pushing the market in the opposite direction.
Understanding the Trendline Trap
Look at the image above. Notice how the market repeatedly breaks the trendline only to trap traders and then reverse:
- Intraday Trap (27 Sep ‘24, Friday) – A quick move above resistance traps day traders into buying before a sharp reversal.
- Swing Trap (07 Feb ‘24, Wednesday-Friday) – A deceptive breakout tempts swing traders, but the market reverses soon after.
- Positional Trap (21 Mar ‘25, Friday?) – A breakout appears to be happening, but is it another institutional trap?
Why Do These Traps Happen?
The answer lies in Hidden Liquidity Zones and Technical Resistance Zones, where big players (FIIs and DIIs) place their orders. Retail traders see a breakout and enter, only to find themselves caught in a stop-loss hunt engineered by institutions.
And here’s the kicker—90% of these traps occur on FRIDAYS when retail traders have the least control over the market heading into the weekend.
How to Avoid Getting Trapped
- Wait for Confirmation – A breakout should be followed by sustained volume and price action, not just a one-day move.
- Use Institutional Data – Learn how FIIs + DIIs manipulate liquidity to avoid falling into their traps.
- Utilize Paid Scanners & Tools – Retail traders need premium TradingView tools, AI-powered scanners, and institutional-level insights to stay ahead.
Want to Trade Like Institutions?
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