On the 1hour chart I'm looking at a rising wedge that gives us a short opportunity. When zooming out a bit it's a very clear picture of a longer downtrend that conforms a short fits in. To trade this I'm going to enter as shown with a great RR of 3.58 (yes, including premature entering instead of breakout). I've chosen for this approach because I probably won't be looking at the chart at breakout. The tight stop will cut the losses pretty quick if things don't workout but still higher than the previous high. To everyone noticing that this wedge has a possibility for a bigger drop. That's right! But because the long term downtrend is not at this level but a bit higher my thoughts are there could pop up some buyers we want to be in front.
Thanks for reading this analysis and hope you traders have a great trading week ahead. I would appreciate a like or a follow if you like my view.
Wesley
Trade active
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Now we are in, will keep you updated!
Trade closed: stop reached
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Same story, will take a look at this later this week. The profit I made covers the losses of these two, and still in profit. That is why risk reward is important.
Comment
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To look back in the future at the past wedges, we can see a good example of a too tight stop.