We have a double top followed by a one bar push down, then the projection point is immediately tested, then the longer wick shoots out further above the double top but cannot maintain any body so closes below. This makes it an ideal short because it's possible there are traders trapped to the long side which might have the effect of pushing price lower. The blue line also indicates an area where price previously had a strong push down. We have a few factors lining up here which give the short a chance. Notice my tight stop, only 30 pips because if price makes another attempt to push higher, I don't want to be in the trade.
Trade active:
Hit +15 so at break even now.
Trade active:
Hit +20 so now at BE +5.
Trade closed: stop reached:
Out for +5, but always keep in the back of my mind that price was hovering between +15 to +18 for at least an hour. I'm sticking to my plan and style of management, while also realizing that price could possibly be at a turning point during stagnant periods. This is where more forward testing is needed.