How to Anticipate a Liquidity Trap

Spot the setup before it traps you

Liquidity traps are where smart money thrives and retail traders bleed. These fake breakouts lure you in, trigger your stop, and reverse hard. But there are patterns — and you can learn to see them coming.

• 1. Price runs into obvious support/resistance fast
• 2. Breakout candle has low volume or a long wick
• 3. No follow-through on higher timeframes
• 4. Price reclaims prior zone quickly after break
• 5. Big wicks + volume spike near stop zones

“The first move is often the fake. The real opportunity comes after the trap is sprung.”

Watch for these signs. Be patient. Don’t chase price. Liquidity traps are mental traps too — and the disciplined trader avoids both.

Study the trap. Trade the reversal. Never trade blind.