This is a typical Wash and Rinse pattern (Double Top in western) where the price “re-tested” the previous resistance. As you can see, the second long shadow has just tested the previous resistance (100.85) and moves 1 pip higher to 100.86.
My Entry
It was based on candlestick pattern. I spotted the Three Black Crows reversal pattern (pattern in box). I went short at the next candle when it opened gap down and moved lower. My entry price was 100.33. My stop loss was at the previous high (53 pips higher than my entry). My target profit was 99.56 (77 pips lower than my entry).
My Entry
It was based on candlestick pattern. I spotted the Three Black Crows reversal pattern (pattern in box). I went short at the next candle when it opened gap down and moved lower. My entry price was 100.33. My stop loss was at the previous high (53 pips higher than my entry). My target profit was 99.56 (77 pips lower than my entry).
Analysis
After the Three Black Crows, piercing pattern was observed. Failed reversal pattern will continue. True enough, it consolidated for 4 hours before the Abandoned Baby formed. A strong reversal warning was given. Next, the bearish Harami pattern was added in as confirmation that the uptrend has come to an end. It was followed by a major conviction (long bearish candle).
After the Three Black Crows, piercing pattern was observed. Failed reversal pattern will continue. True enough, it consolidated for 4 hours before the Abandoned Baby formed. A strong reversal warning was given. Next, the bearish Harami pattern was added in as confirmation that the uptrend has come to an end. It was followed by a major conviction (long bearish candle).
My Exit (My Mistake)
In my opinion, the rickshawman was a profit-taking candle. Its shadow was stretched to “collect” the “thick” stop-loss. My stop-loss was placed at 100.86. So, it was “taken” too. I should not have placed the stop-loss there at the first place.
My Lesson Learnt
I should have placed my stop-loss at previous (x2) high at 101.09. However, it was a bit much for me (76 pips ≈ US$75) as my target profit only around US$76 (77 pips). Alternatively, I could place at previous high + 1 candle, which is at 100.86 + 0.10 (average bearish candle) = 100.96.
In my opinion, the rickshawman was a profit-taking candle. Its shadow was stretched to “collect” the “thick” stop-loss. My stop-loss was placed at 100.86. So, it was “taken” too. I should not have placed the stop-loss there at the first place.
My Lesson Learnt
I should have placed my stop-loss at previous (x2) high at 101.09. However, it was a bit much for me (76 pips ≈ US$75) as my target profit only around US$76 (77 pips). Alternatively, I could place at previous high + 1 candle, which is at 100.86 + 0.10 (average bearish candle) = 100.96.
No comments:
Post a Comment