EXERCISE 5
Look at the following 5 minute chart >>>
By
tymen1 at 2008-06-11
This is a chart of an evening star trade and candle S is the "star".
A stop loss (red dashed line), is set just above this candle.
Short entry is made at the black vertical line.
1) What is special about candle R?
2) Does the top of candle R qualify as a retracement point? If so, why and if not, why not?
3) If your answer to question 2 was yes, then how would you avoid the subsequent action of hitting the stop loss in candles A and B?
4) If your answer to question 2 was no, then what would you have done with the initial entry at the black vertical line?
Answers to exercises 4+5 after several posts of attempts at answers! 