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Hi,
I'm always hesitant to sell in situations like these (first 3 S marks), because I'm afraid that it's a climactic end of the bear trend, and it will quickly reverse. How do you make the difference between this and an actual BO of the bear channel? And how do you manage it?
Hey Casper,
I believe there is not an actual way to know it before the BO really leads to a trend or fails. You take this type of trade knowing that it is probably going to fail and you compensate that with good risk/reward.
I think managing it would be difficult, because you probably have to be quick to get out depending on how the market behaves. But I would use a small stop, like above the bar with the first sell mark, and choose a MM down 3 or 4x my risk. I would also be willing to hold it for longer if the bear trend is strong.
