10/15/2013 German ZEW Economic Sentiment (0500 EDT)
Forecast: 49.2
Actual: 52.8
TRAP TRADE (SPIKE / REVERSE)
Started @ 1.3545
Trap Trade:
————
)))1st Peak @ 1.3556 – 0500:03 (1 min)
)))11 ticks

)))Reversal to 1.3530 – 0501:22 (2 min)
)))-26 ticks
————
Extended Reversal to 1.3501 – 0533 (33 min)
55 ticks

Notes: Report was moderately impressive by beating the forecast, but was caught in a short trend that had begun just about 30 min before the report. This caused an initial long move that was quickly overcome by the sentiment to fall short in the later moments. This created a trickier situation for the setup of the Trap Trade. While the long move and subsequent reversal were ideal, the placement of the orders is not as easy. If you used 1.3550 as the anchor point, the long move would have missed a short order, and then filled the long entry at about 1.3540 and caused an eventual loss. An anchor point of 1.3545 would have been better, but only taken into account the movement of the :00 bar. This would have caused a short entry at 1.3555 to fill, then fall like a rock for 20+ ticks easily. After the first 2 bars, it never wanted to rebound, and methodically fell for almost 30 more ticks in the next 30 min to the S3 Pivot. Then it came back a few ticks and traded sideways.

8/13/2013 German ZEW Economic Sentiment (0500 EDT)
Forecast: 40.3
Actual: 42.0
TRAP TRADE (SPIKE WITH 2ND PEAK)
Started @ 1.3298
Trap Trade:
)))1st Peak @ 1.3312 – 0500:17 (1 min)
)))14 ticks

)))Reversal to 1.3302 – 0507:58 (8 min)
)))-10 ticks

)))Final Peak @ 1.3320 – 0521 (21 min)
)))22 ticks

Reversal to 1.3308 – 0525 (25 min)
12 ticks

Notes: Report was mildly impressive by beating the forecast. This caused a typical bullish reaction, that catered well to the Trap Trade. Using an anchor point of about 1.3298 as the average price action from the last few min in between the PP Pivot and the S1 Mid Pivot, the long move would have filled the inside short entry at about 1.3308, and the long entry at the S1 Pivot at 1.3289 would have been left wanting. In this case the spike peaked at 1.3312 and would have given you a max of 5 ticks in the red, then after 8 min, as it fell to 1.3302 and the PP Pivot gave a target of 6 ticks. This is not the best setup, but it still would be better than the traditional JOBB approach. After the reversal, it rallied for a 2nd peak of 8 more ticks in 12 min crossing the R1 Mid Pivot before reversing 12 ticks back to the 20 SMA. Then it calmed down and traded sideways.