Hello traders! I looked at S&P 500 out of curiosity and realized how nicely the sell setup has formed on the chart. After a strong drop of more than 30%, the price has retraced and slowly consolidated below 0.618 fib level. This level historically is quite strong and on the larger moves plays out well. We have seen that recently the price failed to create higher high which gives another clue towards a drop.
For aggressive traders, the entry at current prices can result in a very good risk-reward ratio, perhaps up to 10:1 depending on your stop-loss. For more conservative traders, the entry point can be after the breakout below 2800 giving more confidence in the sell setup.
Remember that this trade can evolve in up to 1-2 months so once your are in, you have to be patient. The price can arrive to 2000 but I strongly believe that it can drop all the way to 1800. Nevertheless, if you are in a trade, take at least some partial profits when RRR reaches 4:1 and above.
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GENERAL RULES TO KEEP YOUR ACCOUNT SAFE:
1. Do not risk more than 2% of your account per trade
2. Look for a Risk-Reward Ratio of at least 2:1
3. Always use stop-loss
4. Do not FOMO
5. Remember: Patience is the key!
THIS IS NOT A FINANCIAL ADVICE so, please do not follow it if you are in doubt. DYOR!
For aggressive traders, the entry at current prices can result in a very good risk-reward ratio, perhaps up to 10:1 depending on your stop-loss. For more conservative traders, the entry point can be after the breakout below 2800 giving more confidence in the sell setup.
Remember that this trade can evolve in up to 1-2 months so once your are in, you have to be patient. The price can arrive to 2000 but I strongly believe that it can drop all the way to 1800. Nevertheless, if you are in a trade, take at least some partial profits when RRR reaches 4:1 and above.
=============================
GENERAL RULES TO KEEP YOUR ACCOUNT SAFE:
1. Do not risk more than 2% of your account per trade
2. Look for a Risk-Reward Ratio of at least 2:1
3. Always use stop-loss
4. Do not FOMO
5. Remember: Patience is the key!
THIS IS NOT A FINANCIAL ADVICE so, please do not follow it if you are in doubt. DYOR!
Comment:
Well, despite a quite bearish setup we had a strong move to the upside which triggered my stop-loss. To see a posibility for a sell, the price should drop below 2800. If we see a continuation of upward movement beyond 3000 then I would stay away until clearer setup occurs.