The lobster trap in Moonglow Bay is unlocked immediately after saving the whale in The Monster of Moonglow questline. The final part of this questline tasks you with dislodging spears stuck in a whale’s body using the fishing rod. The act of removing them plays similarly to the standard fishing mechanic, reeling and pulling in the opposite direction the spear’s tip points toward. As it’s part of the main story, it’s impossible to miss for anyone attempting to beat the game. Unlike net fishing, however, Moonglow Bay doesn’t introduce a lobster trap tutorial.
These traps can’t be used while sitting along the town’s shores. You’ll have to venture out into the open waters by boat. Find any body of water, then use the lobster trap icon while standing by the edge of the boat. You’ll need to attach either low-grade or high-grade bait to catch anything.
Dropping the trap places a blue crab icon on the map. Leave the area and let the trap sit for one or two days. There won’t be any on-screen or auditory indicator signifying that it’s ready. You’ll have to physically visit the location. If it’s sparkling, that means it’s ready and you’re free to pull it out of the water to find out what you’ve caught.