2B Test of Top, An Example.
From our Trader's Master Class this morning:
She Said: 01-17 10:46 (ET)
A test of the morning high on the SP...aggressive traders can enter a sell stop a tick below the low of the last UP bar, that is still under the blue line. In this case, it's this one here by the arrow, and the sell stop would be at ES 1354.75 limit. If you are not filled within a bar or two, you should cancel it. The stop is there IN CASE it does a 2B test of top.
ispeculator.com
She Said: 01-17 10:49 (ET)
SELL STOP IS ENTERED AT ES 135475 LIMIT.
She Said: 01-17 10:59 (ET)
I AM GOING TO CANCEL MY SELL STOP SHORTLY. IF SELLERS ARE GOIGN TO SHOW UP, IT'S BEST THAT THEY DO SO IMMEDIATELY. T HIS IS STARTING TO LOOK LIKE A BIGGER CONGESTION AREA FOR NOW...
She Said: 01-17 10:59 (ET)
I WILL GIVE IT ONE MORE MINUTE.
She Said: 01-17 11:00 (ET)
I AM FILLED HERE AT 1355. INITIAL STOP LOSS IS ES 1356.
She Said: 01-17 11:00 (ET)
I AM STOPPED OUT.
She Said: 01-17 11:02 (ET)
Looks like 4 bar consolidation instead, going higher, but it's also a test of top on the 15M SP chart, so I'll stand aside, but probably be sorry. Oh well.
ispeculator.com
She Said: 01-17 11:12 (ET)
A tiny trap...need to see thrust now to the upside or else...it's done.
ispeculator.com
She Said: 01-17 11:15 (ET)
Yesterday we talked about how time and price affects things. I guess the time portion is counting bars, using the 4-6 bar limit. And price means if it pulls back "too far" then the pattern will likely fail. So far, I have not quantified the "too far" part, since I have not been asked, but off the top of my head, I will be careful when it's a test of top situation, like now, since this is a potential change of trend area, or if there is a doji star or dark cloud cover pattern at the high, before the pullback - in an uptrend. I click the candlestick button and see what I mean...we see multiple topping patterns, first on the test itself, a semi dark cloud cover and now, another one on the fake out. Odds are this cannot go any higher for now, in this timeframe.
ispeculator.com
She Said: 01-17 11:25 (ET)
Off the 2B test of top, there are two targets. First is the 20EMA below, which has now been achieved. Next, is the other side of the trading range, the lower blue line.
ispeculator.com
= NOTE =
I did not go back in to short it again, because if I was wrong again, the reward would not justified the risk.
Teresa |
