I'm always VERY interested in these places on the chart – the places where price can't go. The places where it tries… it pushes… but it just can't go there.
This is opportunity.
Let's start with the Higher Timeframe chart…
Let's switch now to the trading timeframe…
Reference… this is a BOF Setup as described in YTC Price Action Trader Volume 3, page 28.
great trade! I think it’s worth noting also that patience was needed in order to wait for the setup to materialize. so your post works also as a “Patience part 3” of sorts! 🙂
I’m curious about what your assessment was after your final exit at point 5: looking at the last higher timeframe chart, it seems to me that 4830 just started to work as resistance, after working as support up until about 14:00.
Full disclosure: I also looked at this chart in my own charting software, so I’m trying to reason only based on your last chart, but I may still be biased by 20/20 hindsight.
In real time, I would certainly take profit the way you did at point 5, but right after that I would be looking to enter a new position short on BOF of 4830 – not right away, but I would want to see one or two more bars expecting a marked bullish weakness. Is my thinking correct, here?
The patience was a little different here. My “active” trading session only runs till midday ET. However I’ve started following price beyond that, although not actively trading. More just passively setting alerts at certain prices that I might be interested in and then getting on with other work. So if it’s an exceptional opportunity like this one (break of HOD), I might take it. Otherwise I’m happy to let it go. Anything after 12:00 is a bonus.
This is why I also did not take anything beyond point 5. You’re right that there was follow through SHORT after the exit at point 5. It wasn’t something that interested me though.