This is another trade on the same idea as Royal Bank of Canada. Only this is an example of a 2nd tier entry since the retracement is to the 0.618 level. On this entry we are once again 1 day too late, only on this one we need price to retrace to at least $28.53 to achieve a R:R of 1:2, which is my bare minimum R:R. Initial stop remains the swing low and target is the last major swing high. Ultimately what we trying to do with this setup is to catch a bear
trap in action
, which then runs the stops of the bears and adds to the momentum for the longs, which allows this type of trade to achieve its target in a relatively short period of time, but because of this we need to be quick to accept our losses. Good Trading.