Today's traded resulted in a small loss of -3 ticks.
Position: Long
Entry: 4455.25
Exit: 4454.50
Result: -3 Ticks
The Setup
5 Minute
Consumer Price Index came in at 1.2% vs an expected 1.1%. Price rallied 40 points then retraced to 4432.75. A second high was made and price started to sell off.
30 Second
Price started following a downtrend where support was starting to form. It broke through and formed consolidation, turned and broke the downward trendline. Retest, then tested resistance at old support near 4458.25.
The Idea
My hypothesis was if price could break the downtrend line to the upside, it would come back to test it. At that time I suspected speculative buyers to step in and any shorts that wanted to liquidate their position.
If that retest held, I believed price would retest old support at 4458.25.
Based on my 16 tick profit target, if I entered at the correct time and retest my target would have been hit. However, I entered a bit too late, putting my 16 tick target at 4459.25, which it missed by 2 ticks.
Instead of moving my profit target down, I suspected this resistance would be broken so I left it in.
Order flow started showing absorption on the sell-side and the buyers were not able to break that level.
The Lesson
The idea was correct. It broke up, retested, then retested old support. My entry should have been near 4453.00. That would have made my exit 4457.00, which it hit 3 minutes after the retest.
Going forward I will reassess my entry and exit at the actual time to ensure that my profit target is still relevant. If it is not, I'll adjust my profit target.
Links
For data, I use Earn 2 Trades platform, which also gives you the opportunity to become a funded trader through their combine.
I use Optimus Futures for charting and order entry.
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