10,000 Ft View – 4 Hr Chart
Here’s why I decided to pass on this trade set-up:
I don’t like all this trading in this range, a sign of equilibrium between sellers and buyers.
The origin of the move down (yellow) couldn’t take out the previous lows (purple).
As of result of price action not taking out the previous lows, the Reward to Risk was only 2:1. I’m looking for a minimum Reward to Risk of 3:1, but ideally a minimum of 5:1.
However, the trade is working out at the moment, if price gets pass the immediate demand (red rectangle), the probability of the trade working out will increase.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.