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Unless you know what you are doing or have holding power (apply both to long and shorts), Muddy Water Research shorts is now nearly 100% in paper loss from its short entry position at 29.20.
Now, we can leverage on this article and make use of simple pattern, support, resistance and trend lines to help us.
On 1H time frame, we can see buyers are a little exhausted as they keep on pushing the price higher. Wait for the pattern to break down before shorting. SL should be a few pips above the highest peak of the candles.
Next, know that while this stock looks a little overbought, nevertheless, it is riding on a bullish trend line so any shorting is a counter-trend strategy which requires skills, timing and capital that you can afford to lose. The latter means if you have other better , easier trade opportunities, go ahead and take them. Or use a demo account to short this stock to gain some experience.
When and if the price does tumble down and revisit the resistance turn support line at 43.14, watch this level closely. If I have to short and it goes according to plan, I would take at least 50% profits and adjust my trailing stop loss. The rationale is to avoid making any losses as opposed to maximise profits.
There remains a possibility that price action may rebound from this level. However, if it breaks down, await for bearish signals (pin bar, bearish engulfing candles, etc) before adding or initiating your shorts.
So, you can see there are safety nets where the price action will fall towards before the next sets of action takes place. Like a bull run, price action moves in waves with correction and impulse waves.
Have fun shorting !
Unless you know what you are doing or have holding power (apply both to long and shorts), Muddy Water Research shorts is now nearly 100% in paper loss from its short entry position at 29.20.
Now, we can leverage on this article and make use of simple pattern, support, resistance and trend lines to help us.
On 1H time frame, we can see buyers are a little exhausted as they keep on pushing the price higher. Wait for the pattern to break down before shorting. SL should be a few pips above the highest peak of the candles.
Next, know that while this stock looks a little overbought, nevertheless, it is riding on a bullish trend line so any shorting is a counter-trend strategy which requires skills, timing and capital that you can afford to lose. The latter means if you have other better , easier trade opportunities, go ahead and take them. Or use a demo account to short this stock to gain some experience.
When and if the price does tumble down and revisit the resistance turn support line at 43.14, watch this level closely. If I have to short and it goes according to plan, I would take at least 50% profits and adjust my trailing stop loss. The rationale is to avoid making any losses as opposed to maximise profits.
There remains a possibility that price action may rebound from this level. However, if it breaks down, await for bearish signals (pin bar, bearish engulfing candles, etc) before adding or initiating your shorts.
So, you can see there are safety nets where the price action will fall towards before the next sets of action takes place. Like a bull run, price action moves in waves with correction and impulse waves.
Have fun shorting !
Comment:
price action can remain within the pattern for a while so be patient. Looks like it has a bit more to run up before it corrects
Comment:
one can see that if too eager to get into the position without respecting the pattern, then you would suffer from either being stopped out or a paper loss for being too early.
Comment:
wow, wow and wow !! Totally speechless. I hope Muddy water has gotten out of this position else they are in hot soup............