In the absence of any unexpected news event, or some other reason to shock the market, a reversal will usually not just appear out of nowhere.
V-Turn reversals happen. But they're not the usual outcome.
More often than not, there will be multiple clues in the lead-up to the reversal.
The challenge for you, as a trader, is to learn to read the clues as they're presented and adjust your bias and trade expectations to suit.
Very appreciate your business and your web site.
You are really my best TEACHER (and the Market as well)))
Could you please explain why not to take C-trap and take SHORT right after closing C ? All requirements are met: 1) level (Res) 2) strong setup (trap) 3) bull’s weakness 4) strong bearish C-bar
And, if I don’t mistake, you took such a trades
Thank you VERY much for coaching and explanation
Thanks Ruslan for your kind words.
Why did I not short on the close at C? Please bear in mind that this was 3.5 years ago, so I don’t actually recall.
But looking at the chart I’d say it’s perhaps a combination of factors. I had only just been taken out of my LONG trade seconds earlier. It can be hard to flip a position from LONG to SHORT, unless there is a particularly good setup with reason for follow through in that direction (this wouldn’t qualify). Plus, where would I put the stop? There is no structure on the LTF or TTF chart for a sufficiently tight stop. It would need to be right above the high of C, offering insufficient R:R to the first potential target area.
Maybe I saw something else live? I don’t recall. But certainly those two factors would most likely explain the lack of entry, despite a rather bearish candle.
Lance, thank you very much for explanation.
Got your idea.
Will keep on studying your blog.