Re my earlier post on the 6E trade, the above shows a much better entry (highlighted in blue).It's a typical Resistance-Turned-Support plus INSIDE BAR setup. Though the inside bar had closed below resistance, the candle following it had opened above and went up strongly. A stop could have been placed a tick below the low of the inside bar, and the trade can be allowed to run for at least 4 candles. 5 is a magic number - it's a fib number and 5th is often a reversal candle. So even if I were to hold the trade, I'll most probably run by the 4th...or more likely the 3rd candle.
Along an extended wave 5 (that ride up to the start of the "handle") is NOT a place I would add contracts though, if I were scaling in. It's actually where I would scale OUT.
A throwback after a move beyond the the top of the handle, one that finds support at the top of the handle - that's where I would add contracts.
It's all about the handle and what forms after it. A handle that retraces more than 61.8% is a bad sign. 38.2 is good. The move up from the end of the handle - if it doesn't exceed the top of the handle, I'll wait to see if a double top is in the making instead.
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