BB TRAP STRATEGY – RRJ39332

THIS STRATEGY WORKS IN INTRADAY, SWING AND POSITIONAL. HIGER THE TIME FRAME
MORE SEVERE THE PRICE MOVE IN OPPOSITE DIRECTION.

BB – BULL BEAR TRAP OR BEAR BULL TRAP.

MEANS LONG POSITIONS ARE TRAPPED ON TOP AND PRICE FALLS OR SHORT POSITONS ARE TRAPPED ON
BOTTOM AND PRICE GOES UP.
BULLS TRAP IS HIGHLY RELIABLE AND SUCCESSFUL, BECAUSE THE BULLS HAVE ALREADY BOUGHT AND
HOLDING THE POSITIONS, WHICH WHEN EXITED RESULTS IN HUGE PRICE FALL DUE TO PANIC. BUT, WHEN
BEARS ARE TRAPPED AT BOTTOM, PEOPLE FEAR OF ENTERING IN FRESH LONGS. SO DEMAND IS LESS AS
COMPARED TO SUPPLY AT TOP. HENCE BULLS TRAPPING IS MORE SUCCESSFUL.

INTRADAY STRATEGY
TIME FRAME = 15 MIN.
CAN BE DONE ON ANY T.F – 5,10,15,30,60MIN. IN INTRADAY.
BUT ACCORDING TO OBSERVATION AND STUDY WORKS GREAT ON 15 MIN. T.F IN INTRADAY.
2nd candle means next candle after the candle which formed outside upper Bollinger band.
3rd candle means next candle after the 2nd candle.
Bb trap can be formed later in the day but, the morning bb trap are most effective.

STRATEGY STEPS:-
1. FILTER OUT STOCKS WHICH HAS OPENED GAP UP FROM PREVIOUS DAY CLOSE.
2. THEN LOOK FOR 15MIN. CANDLE FORMED OUTSIDE UPPER BOLLINGER BAND.
MEANS OPEN, HIGH, CLOSE AND LOW – ALL OUTSIDE UPPER BB.
3. CANDLE COLOR CAN BE EITHER RED OR GREEN.
4. WAIT COR NEXT CANDLE TO CLOSE BELOW VWAP AND PREVIOUS CANDLE LOW, WHICH IS NOT
POSSIBLE IN EACH STOCKS AND WE CAN MISS OUT 75% OF STOCKS, SO FOLLOW STEP NO.5.
5. WAIT FOR NEXT CANDLE TO CLOSE BELOW VWAP – HIGH CHANCES THAT THIS WILL BE RED
CANDLE WHICH RESULTS IN HIGHER ACCURACY. IF CANDLE IS GREEN THEN IS SHALL SHOW
REJECTION FROM TOP FORMING LONG UPPER WICK AND ALSO, PRICE CLOSE BELOW VWAP ON
15MIN T.F
6. BEST IF THE 2ND OR 3RD CANDLE CLOSES BELOW VWAP AFTER FORMING CANDLES OUTSIDE BB.
BECAUSE MORE THE TIME IT TAKES, LESS WILL BE THE RELIABILITY AND EFFECTIVENESS. YOU WILL
GET MANY STOCKS SO DON’T BE IN A HURRY AND FOMO.
7. ENTRY:
NOW ENTRY CAN BE TAKEN IN 2 PARTS:
1. AS SOON AS THE CANDLE CLOSES BELOW VWAP, TAKE 50 % QTY. BECAUSE SOMETIMES PRICE
DON’T GO BACK TO TOUCH VWAP. SO OUR TRADE IS NOT MISSED IN SUCH CASES.
2. WAIT FOR PRICE TO COME BACK TO TOUCH VWAP AND ENTER OTHER 50% SHORT POSITION AT
or NEAR VWAP.

OR, WAIT FOR PRICE TO COME BACK TO VWAP AND TAKE 100% POSITION AND AVOID THOSE
STOCKS IN WHICH PRICE DON’T COME BACK TO VWAP. DON’T REGRET OF NOT TAKING
POSITIONS AFTERWARD. THERE WILL BE MANY STOCKS, AND YOU CAN’T TRADE THEM ALL.

8. STOPLOSS:
TWO TYPES:
1. EXIT THE POSITIONS IF TWO GREEN CANDLE CLOSES ABOVE VWAP OF 15 MIN. EACH. ALSO S.L
WILL BE SMALL, BECAUSE ITS BIG PLAYERS MONEY . SO DON’T BE SCARED. WAIT FOR CLOSE OF
2 CANDLES. SOMETIMES PRICE MAY FORM LONG UPPER WICK AND AGAIN CLOSE NEAR VWAP.

2. WAIT FOR 1 CANDLE CLOSE ABOVE DAY HIGH. THIS IS YOUR SYSTEM STOPLOSS WHICH YOU
HAVE TO PLACE IN YOUR TERMINAL WHEN YOU TAKE THE ENTRY.
THIS FAILS 5% OF TIMES ONLY, ACCORDING TO BACKTEST RESULT.

9. IF THE TRADE IS IN LATE NOON. THEN PRICE MAY BE AWAY FROM VWAP, IN SUCH CASE WAIT FOR
PRICE TO CLOSE BELOW THE LOW OF CANDLE WHICH FORMED OUTSIDE BOLLINGER BAND. THEN U
CAN SHORT SELL. (ONLY FOR EXPERIENCED TRADERS).

10. DON’T BE AFRAID AS PRICE MAY BE VOLATILE UST WAIT FOR 15MIN. CANDLE CLOSE TO TAKE A
STOPLOSS.

11. SOMETIMES PRICE MAY CLOSE BELOW VWAP AND GIVES US ENTRY, BUT THEN STARTS TO
CONSOLIDATE AND MAKE SMALL SPINNING TOPS DAHI CANDLES AND REMAINS RANGE BOUND.
YOU MAY EXIT THIS STOCKS, BEACAUSE IN SUVH CASE PRICE MAY REVERSE AND BLAST. OR YOU
CAN REDUCE YOUR STOPLOSS AND PLACE JUST ABOVE DOJI OR VWAP…… (BASED ON
OBSERVATION). ALSO CHECK IF THE PRICE CLOSED (CROSSED ABOVE) VWAP OR 20SMA IN 1HR
CHART AND HILEGA MILEGA IN BUY.

THIS WILL BE GIVE HINT TO EXIT AS HIGHER TIME FRAME IN BUY.

12. TARGET:
TARGET WILL BE 20SMA ON 15 MIN CHART. IT MAY COME VERY FAST OR SLOW AND STEADY
AFTER 12 PM. SO DON’T PANIC AND WAIT. AS 20SMA IS DYNAMIC AVERAGE, SO AS THE TIME
PASSES THE TARGET WILL BE REDUCING.

ALSO KEEP A LIMIT ORDER NEAR DAY LOW OR AT 1% OF STOCK PRICE. BEACAUSE SOMETIMES
PRICE FALLS TOO FAST AND AGAIN COMES BACK TO VWAP. SO IT HELPS TO BOOK 50% PROFITS
AND IF THE S.L IS TRIGERED AFTERWARDS, THEN WE WILL STILL BE IN PROFIT.
MOVE YOUR TARGET UP EVERY 15MIN. BASED ON 20SMA.
IF PRICE CLOSED BELOW 20SMA THEN , MORE FALL CAN BE SEEN IN PRICE, TO A PREVIOUS
SUPPORT OR LOWER BOLLINGER BAND.

JUST KEEP IN MIND KEEP TRAILING YOUR STOPLOSS AFTER ATLEAST 1% MOVE HAPPENED IN YOUR
DIRECTION AFTER ENTRY TAKEN. ALWAYS REMEMBER 10Rs. PROFIT IS ALSO A PROFIT AND BETTER
THAN 100Rs. LOSS.