Support-Turned-Resistance Setups1 hour into US trading session, 6E bounced off the floor of an Ascending Broadening Wedge, hit resistance and turned down, forming a typical Partial Rise. The outside bar is the 2nd candle in a Market Structure High, and the Inside Bar is the Trigger Candle.
An hour later, price did a typical pull back to the uptrendline of the ABW, piercing a resistance on its way up, but closing only once above the resistance. We have a MSH, and the Trigger candle is an Inside bar again.
In both cases, we have more than 2 bearish candles that closed BELOW what used to be a support line before price pulled back to hit that line again. A MINIMUM of 2 closes below is needed if we're looking for high probability trades - it's an indication that that line is no longer good as support, and that price is likely to stay below.
Inside bars should only be used as a trigger when it's found in significant and market structure lows and highs. They are seen everywhere, but only the ones that are at swings and MS highs and lows should be traded.
No comments:
Post a Comment