Hi Traders,
Another week presents itself and I have spotted a False Break Out on Dow Jones. Price gave a push soon as the market opened which led to the break of a resistance level at 31400. The recent four-hour candle close has pushed back below the range giving me two strong signs which I truly like and sparking confidence in this setup.
1stly We have a strong push and close with a strong bearish engulfing candle stick back below31400. Secondly, you will see that price also created an evening start pattern formation, The fact that this pattern was created just above resistance with the bears taking control and coming in strong I am now locked and loaded to start taking shorts. Essentially I would love a slight pullback of the recent candle before entering more shorts. My stop will be tight as I expect the following candles to respect the high of 31589.
My target is at the low of 29800 because of the nature of the entry criteria for this trade. Understanding that a false break out usually leads to a Large move I am more than happy to hold this one all the way.
No matter how juicy a trade may seem the only thing I can control is myself and that means staying true to the parameters of my risk management. My risk is always predetermined.
Happy trading
Renaldo Philander
Another week presents itself and I have spotted a False Break Out on Dow Jones. Price gave a push soon as the market opened which led to the break of a resistance level at 31400. The recent four-hour candle close has pushed back below the range giving me two strong signs which I truly like and sparking confidence in this setup.
1stly We have a strong push and close with a strong bearish engulfing candle stick back below31400. Secondly, you will see that price also created an evening start pattern formation, The fact that this pattern was created just above resistance with the bears taking control and coming in strong I am now locked and loaded to start taking shorts. Essentially I would love a slight pullback of the recent candle before entering more shorts. My stop will be tight as I expect the following candles to respect the high of 31589.
My target is at the low of 29800 because of the nature of the entry criteria for this trade. Understanding that a false break out usually leads to a Large move I am more than happy to hold this one all the way.
No matter how juicy a trade may seem the only thing I can control is myself and that means staying true to the parameters of my risk management. My risk is always predetermined.
Happy trading
Renaldo Philander