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Specialists' trap

Price action · Intermediate · Daily bars · Popularized by Larry Williams

A breakout from a consolidation box fails and closes back inside — trade the unwind the other way.

Price coils in a range, breaks out — then closes right back inside. Everyone who chased the break is trapped. You trade the unwind.

How to trade it (bullish)

  1. Setup: After a consolidation (the box), price breaks below the range low but closes back inside the box.
  2. Entry: Buy at the trap bar's high — or on the next bar if you want confirmation.
  3. Stop and exit: Stop below the false-breakout low. Target the opposite side of the box.

How to trade it (bearish)

  1. Setup: After a consolidation (the box), price breaks above the range high but closes back inside the box.
  2. Entry: Sell at the trap bar's low — or on the next bar if you want confirmation.
  3. Stop and exit: Stop above the false-breakout high. Target the opposite side of the box.

Why it works

Consolidations attract breakout traders who place orders just beyond the range. A break that closes back inside means those orders got filled at the worst possible place — they're trapped and must cover, which drives price back across the box.

Watch out for

Needs a genuine prior consolidation — don't apply it in a strong trend. Choose N to match the box you actually see.

Pairs well with

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Popular markets for this pattern: Crude Oil, Corn, Cotton, USD/CHF