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Hi PA Gurus,
I took this as a Wedge Reversal and took profit with 2R.
Now it is the High 2 at the moving average. Should I long it again?
The reason that I think I should long:
- the previous trend is tight channel
- the square is a trading range, if it break the trading range, the potential profit is huge based on the measure move.
- As I took profit previous, I remember Al said if you cannot enter again, you should not leave the market. Then I think I should enter the market again.
My question is
- whether I am too optimistic and ignore some risks? is it a real high Reward vs risk trade?
- If I long it which is the correct position to put stop loss?
- And should I take some profit at the previous high, which is 1:1 Risk/Reward position
Thanks in advance. Any advice will be greatly appreciated.
Sorry. This is the first time I use the forum and I uploaded the snapshot yesterday. And have no idea why it failed. This is the chart.
Now it is the High 2 at the moving average. Should I long it again?
Yes, absolutely. The market turned AIL after the selloff. The rally is strong enough to get a 2nd leg, probably as a leg 1 = leg 2 MM. This is a H2 with a strong buy signal bar.
the square is a trading range, if it break the trading range, the potential profit is huge based on the measure move.
Yes, it is a large TR that is part of a bull channel, so in the grand scheme of things, one should expect a BO. However, the selloff(which created a wedge and after which you bought) broke a fairly major higher low(at the start of the box, I can't exactly mark it as I'm responding through my phone - if you need a clarification, do let me know).
Since, it broke a major higher low, you should expect some sellers above the highest high visible on the chart. So, MM based on the large box is still uncertain and would only be confirmed after seeing how strong the BO is actually is.
If I long it which is the correct position to put stop loss?
There are 2 ways to manage the trade(to me). One would be to buy above the H2 and place a stop below the lowest low among the H1 or H2. Second would be to place your stop all the time way below the bottom of the bull channel(which followed after the wedge) and trail your stop after there is a successful breakout following the H2.
The first way of management would require you to enter again after a strong setup if the market is still in AIL. The second one is if you don't want to manage your position too much. I prefer the first one.
And should I take some profit at the previous high, which is 1:1 Risk/Reward position
Yes, I would for the reason explained above. There would be some sellers waiting for at least a scalp. If the bear scalp above the high fails, I will enter again.
Thanks mate, you are a guru in my heart.
You are right the bears wanted to create a low high and made a deep PB. It was a scalping opportunity.
As you mentioned it is a broad channel, I had better wait the price test the channel.
Thanks again.
Now it is the High 2 at the moving average. Should I long it again?
Yes, absolutely. The market turned AIL after the selloff. The rally is strong enough to get a 2nd leg, probably as a leg 1 = leg 2 MM. This is a H2 with a strong buy signal bar.
the square is a trading range, if it break the trading range, the potential profit is huge based on the measure move.
Yes, it is a large TR that is part of a bull channel, so in the grand scheme of things, one should expect a BO. However, the selloff(which created a wedge and after which you bought) broke a fairly major higher low(at the start of the box, I can't exactly mark it as I'm responding through my phone - if you need a clarification, do let me know).
Since, it broke a major higher low, you should expect some sellers above the highest high visible on the chart. So, MM based on the large box is still uncertain and would only be confirmed after seeing how strong the BO is actually is.
If I long it which is the correct position to put stop loss?
There are 2 ways to manage the trade(to me). One would be to buy above the H2 and place a stop below the lowest low among the H1 or H2. Second would be to place your stop all the time way below the bottom of the bull channel(which followed after the wedge) and trail your stop after there is a successful breakout following the H2.
The first way of management would require you to enter again after a strong setup if the market is still in AIL. The second one is if you don't want to manage your position too much. I prefer the first one.
And should I take some profit at the previous high, which is 1:1 Risk/Reward position
Yes, I would for the reason explained above. There would be some sellers waiting for at least a scalp. If the bear scalp above the high fails, I will enter again.
P.S. I forgot to mention, the only PA guru here really is Dr. Brooks. He doesn't post on the community forum.
