We all know that some of the big market movers are Fear & Greed.
While Greed is what can keep a trader into a possible losing trade, Fear is ultimately the sentiment that will generate the most short term momentum with the biggest move around some key areas due to traders’ stop loss being hit converged with possible U-turn change of mind triggering even more orders in the same direction, leading to possible same mistake again etc.
Though it has always been an interest of mine to keep in mind what other traders might do and where/when, and those who know me on chat will know that sometimes (while I was mainly trading spot forex) I sometimes referred this the “carrot” etc, this approach has everything to do with defining where other traders stops are.
So this is an idea that I called SIWW for “Shit I Was Wrong !”, though really I’m not re-inventing the wheel.
The whole idea here is again to find areas where things go unexpectedly WRONG for the vast majority of retail traders. This concept is all about FAILURE… Nothing, expect news and stuff like that, beats an obvious setup that is going through an EPIC FAIL.
Whether it is an obvious Support or Resistance level that tries to get broken, or the contrary by going back in, or even a good Fibonacci level that was “meant to react” but ultimately fails (really a funny one to watch), a nice double-top or head & shoulder that gets suddenly invalidated, etc etc. The key concept here has that it has to be UNEXPECTED and reflected as such on charts. You will need to feel that panic sentiment kicking in and jump in riding the train with the sharks out there, eventually you will become able to pinpoint areas at times when failure may occur before they do then watch it happening with a cruel smile on your face.
Although generally more applicable to non-expiring assets, the concept can be used with binary options as well due to the fact that if you do this and time it right your setup will be followed by such momentum that you can eventually get an edge. The main difficulty here will be not to confuse apples with oranges. Trading like this also requires a minimum of understanding about forex ordering process, basic PA understanding, ideally a bit about spread & ticks, and definitely some screen time because it is all rather subjective and real-time focused.
You also need to look for this while big sharks are around for small fish like us (London, NY am etc) otherwise SIWW could quickly become CIWR (= Cool I was Right)!
I will sometimes share screenshots here but won’t spoon-feed at all, my intention is to share an idea while YOU use your brain
Don’t forget, it’s not a strategy, it’s a concept to keep in mind while trading like a chess player. And don't be too greedy or you will become shark food yourself.