The concept of trapped buyers and trapped sellers refers to situations in which traders or investors are “trapped” in their positions and are unable to exit the market without incurring significant losses. This can occur when there is a sudden shift in market conditions or when there is a lack of liquidity in the market, which makes it difficult for traders to exit their positions.
Trapped buyers are traders who have bought a financial instrument at a high price and are unable to sell it at a profit because the market has moved against them. They are “trapped” in their position and are unable to exit the market without incurring a loss.
Trapped sellers are traders who have sold a financial instrument at a low price and are unable to buy it back at a lower price because the market has moved against them. They are also “trapped” in their position and are unable to exit the market without incurring a loss.
The concept of trapped buyers and trapped sellers is particularly relevant in intraday trading, where traders may hold positions for only a short period of time. In this type of trading, it is important for traders to be able to quickly adjust their positions in response to changing market conditions, and being “trapped” in a position can be costly.
Overall, the concept of trapped buyers and trapped sellers refers to situations in which traders are unable to exit their positions without incurring significant losses, and it is particularly relevant in intraday trading where traders hold positions for only a short period of time.