We have what looks like a around key resistance, with a large that is protruding previous price. This is one of my favorite type of pin bars because it works like a slingshot. Price tried to break into higher ground, but the bears stepped in showing their strength, pushing the price back below the key level.
My trade was taken on the 50% retrace of that protruding in conjunction with:
- Market swing point ( )
- Moving averages are neutral indicating a possible range-bound market, if so that is good news for the trade
- 50% retrace from the most recent highest high and lowest low
- Recent event area
- The overall trend is down (long-term) but potentially in a short-term range
- trending and curling down once more
- Full in extreme levels and turning down
This is a good set-up with a potential 3 to 1 risk if it reaches the bottom part of the new range. Remember set your stops and do not risk to much if you decide to take a similar position.