I had been waiting for this trade to set up and I had it in mind not to jump the gun but to wait for levels to hit.
But only R1 was touched and CBOL, y’day High and the fib remained untouched. I took the trade with a SL above those levels – but only just. And I decided that if this was stopped I would make a second attempt at the trade.
What mindset would I need to trade this? What were my options?
I could take the TL break to fade the level on the assumption that the PA is telling me a reversal is on cards and that the market has come close enough to the levels to make the trade make sense.
I could take the trade using a wider stop to make sure I didn’t get stopped out on a swift spike into CBOL, but doing this means that the trade has to work much harder to get 1:1 and more.
I could have taken a break of the stair step TL on the M3 chart (shown below).